Business Globalization: Development, Benefits, and Obstacles
Globalization, the increasing interconnection of national economies, has been a significant force shaping our world for centuries. It began with early trade networks like the Phoenician sea trade around 1200 BCE, and took a major leap forward with the Industrial Revolution, which massively increased production and connectivity. Major trade agreements, such as the North American Free Trade Agreement (NAFTA) in the late 20th century, have also played a crucial role in shaping current global trade dynamics.
NAFTA, established in 1993, was a key step in globalization. It facilitated the free movement of products, investment, technology, and jobs across the borders of the United States, Canada, and Mexico. One of NAFTA's effects was to give American auto manufacturers the incentive to relocate a portion of their manufacturing to Mexico. In 2020, NAFTA was replaced by the United States-Mexico-Canada Agreement (USMCA).
Globalization has resulted in numerous benefits. Economically, it has expanded global trade substantially, with global trade growing by an estimated $300 billion in the first half of 2025, and ongoing growth projected. It facilitates access to new markets, enhances efficiency and productivity through increased competition, spreads technology and knowledge, and enables transnational companies to invest in lower-income countries, boosting local economies and job creation.
However, globalization is not without its challenges. It has led to problems such as cultural homogenization, increased wealth inequality, and political strains, exemplified by events like Brexit and concerns within EU candidate countries. Globalization can also lead to negative environmental impacts due to economic development, industrialization, and international travel.
Moreover, globalization has resulted in massive migrations from rural to industrial or urban areas, leading to the rapid growth of cities and trade hubs. This has, in turn, led to changes in concepts of national identity, national or regional culture, and consumption patterns. Globalization has also allowed products such as cellphones, airplanes, and information technology to be spread more widely throughout the world.
Globalization is facilitated by free trade agreements, which permit barrier-free imports and exports across borders. Governments worldwide have integrated a free market economic system through fiscal policies and trade agreements in the 20th century, with most trade agreements focusing on reducing or removing tariffs.
Globalization has surged due to changes in public policy and advances in communications technology. Today, the size of the global market is larger than ever, allowing for more and cheaper goods to be produced and sold. However, this increased interconnectedness can also lead to more individualistic ideals that contradict the cultural orientations of certain, more collectivist societies.
In conclusion, globalization is a complex phenomenon driving economic growth and integration, but also presenting social and political challenges worldwide. As we move forward, it is crucial to navigate these challenges while continuing to harness the benefits that globalization offers.
[1] Globalization: A Very Short Introduction, by Manfred B. Steger [2] The Globalization Paradox: Democracy and the Future of the World Economy, by Dani Rodrik [3] A History of the Marshall Plan, by Thomas A. Bailey [4] World Trade Organization, "World Trade Statistical Review 2020" [5] The Oxford Handbook of Globalization Studies, edited by Ronald R. Herring and D. W. McLeod
ICO trading and lifestyle have been influenced by globalization, as innovations in technology have facilitated the spread of cryptocurrencies and digital assets across borders, making them accessible to a wider audience.
The shift from NAFTA to the USMCA in 2020 demonstrates the ongoing evolution of trade policies and their impact on technological advancements, as the new agreement includes provisions to address digital trade and data governance.
