Common Effects of Globalization

By Sudirman

The development of the human interaction and technology as it is now makes the term 'globalization' more familiar. This phenomenon seems to have been ingrained, every activity, food, clothing and lifestyle we have been affected by global civilization. Globalization is a special phenomenon in human civilization that moves continuously in a global society. 

The meaning of globalization is different from an economic point of view. According to the United Nations Committee for Development Policy, globalization is the increasing interdependence of the world's economies as a result of the scale of growth across trade, commodity and service borders, international capital flows and the wide and rapid spread of technology.

Regardless the meaning of the term above, there are impacts of globalization that must be considered. The positive and negative impacts of globalization can affect the order of life around them. Globalization is an influence that occurs as a whole, including Indonesia, which has undergone many changes globally. The following are the most obvious common effects that we can feel.

First of all, the economic aspect of globalization has brought about an improved standard of living and reduced poverty for many people (McNichol, 2004). It is proven that trade between developing economic countries boosts growth. In addressing the effect of free trade, many globalization proponents think that globalization should benefit poor countries in terms of income generation and improving living standards. 

Statistics indicate that in developing countries that opened their economies to trade, the number of people living in absolute poverty declined by 14 percent. 

In contrast, poverty increased by 4 percent in developing countries that did not participate in free trade (Kusuma, 2010). This is due to the global nature of the market.

Furthermore, Globalization leads to growing competition on a global basis (Michael, D 2003). There are many beneficial effects of competition that can increase production or efficiency.  Competition and the widening of markets can lead to specialization and the division of labor.

 Specialization and the division of labor, with their implications for production increases, now exist not just in a nation but also on a worldwide basis. 

Overall, these beneficial effects of competition stemming from globalization show its potential value in improving the position of all parties, with the potential for increased output and higher real wage levels and living standards. The result is a potential for greater human well-being throughout the world.