Effects of Globalization

Introduction Globalisation has been the most debated topic among businesspeople, economists and politicians in the recent years. Globalisation is defined as “the shift towards a more integrated interdependent world economy” (Hill, Cronk, & Wickramasekera, 2008). The trend towards greater globalization has been driven by two macro factors. The first factor is the declining trade and investment barriers that have occurred since the end of World War 2 (Hill, Cronk, & Wickramasekera, 2008). The next factor is the dramatic technology developments in recent years in communication, information processing and transportation (Hill, Cronk, & Wickramasekera, 2008). The following research will focus on the positive and negative impacts of globalisation on jobs, wages, the environment, working condition and national sovereignty.
Jobs
Benefits Heckscher-Ohlin theory asserts that more abundant a factor, the lower its cost (Hill, Cronk, & Wickramasekera, 2008). High population countries like China and India, which provide abundant labours in low cost, can attract more investment from overseas. Hence, globalization can boost greater employment opportunities in less developed countries (Ghose, 2000). For example, the rapidly expanding rose industry in Ecuador generates US$240 million in sales and supports tens of thousands of jobs in Ecuador (Thompson, 2003). Apart from that, India’s computer-software and service, which is undertaking the outsourced office functions for companies based in United States, Australia and the United Kingdom, has employed 1.3 million people in 2006 (Bhattacharjee, 2006). In addition, Accenture, which is a large US management consulting and information technology firm, has recently created 5000 jobs opportunities in software development and accounting in Philippines (Birnbaum, n.d.). Procter & Gamble has also employed 650 professionals who prepare the global tax returns for the company in the Philippines (Engardio, Bernstein, & Kripalani, 2003).