The Effects of Economic Integration & Globalization

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Trade between different people is not a new occurrence, but is as old as history itself. New advances, however, constantly help make this trade easier to accomplish. In the past century, advances in trade have grown dramatically. Technologies such as aircraft, the telephone, and the Internet have all contributed to the rise in economic integration, or "globalization." This has various positive and negative effects.

Finance Opportunities

  • One effect of the increase in globalization is a rise in the opportunities for finance. In the past, entrepreneurs and companies were limited to only local sources of money from investors. As world economies come closer together, however, these limitations on finance sources decrease.

    In a global economy, developers have access to investment funds from nearly any country. A company based in Canada, for example, can seek investors from the United States, Mexico, or overseas in Europe or Asia. While this practice was once rare, it is increasingly common.

    The increased opportunities for financing are not limited to advanced nations. In less developed areas of the world, such as areas of Africa, new ventures can access funds from countless international sources. The non-profit group Kiva International, for instance, frequently provides venture funding to poor individuals around the world, allowing them to turn an idea into a sustainable business. Globalization makes this possible.

Language Changes

  • The increase in globalization also has a substantial effect on language. Before global trade was possible, many areas of the world were isolated from a communications standpoint. In the past, it was common for the citizens of a country to have exposure to only their native tongue.

    As international trade has increased, however, some languages have become more standard. English, for example, has become widely recognized as the universal form of professional communication. In fact, English is now required for all international airline pilots, regardless of the locations they are flying between.

    Globalization increases awareness for many other languages in addition to English. Languages that may have been considered obscure or useless in the past, such as Mandarin Chinese, are now being studied by many American students and businessmen. Through globalization, many people recognize that the ability to speak more than one language can be a valuable asset in an integrated global economy.

Cultural Impact

  • Both global trade and economic integration create many cultural effects. As with language, the culture of a country can become popular in other regions of the world as it is discovered. One common example of this cultural impact is food. Countries in Asia, for instance, have traditionally had cuisine that is very different from Western-style dishes. In today's global economy, however, it is not uncommon to see American restaurants such as McDonald's in many Asian cities.

    This dissemination of culture works in the reverse direction as well, as the popularity of Chinese and Japanese restaurants in North America shows. Globalization allows cultural items such as food, clothing, and entertainment to be easily shared and enjoyed by citizens of any country.

Commercial Advances

  • Many commercial advances are also caused by globalization. These effects are similar to the cultural impacts already mentioned. Advances in commerce allow goods and consumer items to be easily traded. These goods are usually not part of a country's cultural heritage, but are developed and manufactured in one location.

    One of the most popular car companies in North America, for example, is Toyota. Of course, this company is Japanese. Globalization has allowed this Asian automotive company to directly compete with American auto makers, even in the country where the car was first invented. In a world or globalization, the performance and popularity of a commercial product is more important than where it is produced.

References

  • Photo Credit world image by Clark Duffy from Fotolia.com
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