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In simplest terms, globalization refers to global interconnection in terms of trade, ideas, culture, etc. In a globalized world, social and economic activities transcend the borders and regions.
From a business point of view, globalization refers to global interconnections in terms of trade and exchange of ideas, equipment, manpower, technology, etc. A globalized economy allows companies from around the world the opportunity to participate (in terms of manufacturing, trading, marketing, etc.), unlike a closed economy, which excludes participation for many. This opening up of markets is a win-win situation for all the constituent parties. While the companies get access to markets, people get access to more choices. It also allows resource-rich (and service-rich) countries to export their products to resource-deficient (and service-deficient) countries. This has resulted in high growth rates in a number of countries, such as India.
Globalization has also resulted in environmental damage and emergence of organized crime and violence, as undesirable consequences.
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In business terms, globalization means that trade and supply chains are no longer limited by national boundaries; instead, large companies are truly global, operating across the world to maximize efficiency. This has been facilitated by the growth of global transportation networks. On a positive side, this lowers costs and reduces prices of many consumer goods.
For example, rather than being limited to local labor markets, companies can seek out the locale with the lowest wages for manufacturing, balancing the cost of transportation with labor costs. Companies may also move manufacturing to countries that have limited environmental regulations and oversight and little in the way of labor laws or protections, leading to sweatshops, child labor, and environmental degradation.
Companies can choose to be headquartered in countries with the lowest taxes, creating such strategies as the "Double Irish with Dutch Sandwich" to avoid paying taxes. While this does maximize profitability, increasingly it shifts the burden of paying for infrastructure (such as roads, fire fighters, bridges, and police forces) onto middle-class wage earners who essentially subsidize the wealthy who profit from infrastructure but participate in global tax avoidance schemes by earning money from capital (which is global and can avoid taxes) rather than wages (which are local and get taxed more heavily).
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