What Is the Importance of Globalization?
Globalization allows countries to benefit from economic synergy and collaborate in handling political, social and economic challenges. A global economy expands the reach of buyers and sellers for governments and countries. A broader marketplace allows producers to fetch more for their goods, and a global supply network gives public and private entities more buying options.
Globalization also increases opportunities for companies to expand operations in foreign markets. By accepting foreign investment, a government promotes build-up of its infrastructure. Foreign companies may also hire local employees, which increases domestic employment levels. American companies expand into foreign markets, develop new revenue streams and bring some of that money back into their U.S. operations. This increased capital allows for business expansion and increased levels of hiring.
Government leaders are able to communicate about ways to mutually improve economic conditions and share in the positive economic results. Openness between governments and industry leaders contributes to shared knowledge and resources. Many industries hold international meetings in which companies share insights and trends that benefit all involved.
More domestic competition also forces some companies to grow internationally or risk failure. Developing nations present opportunities to not only develop new revenue streams, but tap into new pipelines for capital.