Introduction

One of the realities of today’s world is globalization, which came into being as economies liberalized over the past decades. It is probably not prudent to think of globalization only from the economic standpoint because free international exchange today encompasses various fields like commerce, labour, culture, education and even sports. As par its popularity is the constant debate about the implications of globalization. Proponents of globalization feel that this open economic order has benefitted national economies immensely and has also opened by opportunities for labour and students. However opponents of globalization opine that the picture is not as rosy as it is made out to be. Globalization leads to skewed development and also unemployment in many of the developed nations. The expansion of industrial units and manufacturing activities also has negative impacts on environment which is not desirable. Inspite of the debates and the storm kicked up, it can be assumed that globalization is here to stay and will enhance in scale and implementation with time. In this paper we look at how globalization has positively impacted economies and what are its undesirable impacts. We also explore the impact of globalization of Australia and on specific groups like individual, organizations and community.

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Definition of globalization

It is perhaps difficult to zero in on an apt definition of globalization which encompasses all the different facets it represents. Experts have looked at the subject from different perspective and that has contributed to the floating of different definitions of globalization. Therefore a single universal perspective of globalization is difficult to arrive at (Muhammad, et.al. 2011). For the purpose of this paper we consider a commonly used definition of globalization which looks at globalization as a process which integrates economies of the world. It is the policies thorough which economies transact globally. It is also the process through which people, government and corporates of different countries integrate (Rothenberg 2003). This integration leads to an exchange which value adds to the exiting and therefore potentials are realized. The above definition focuses on the economic aspect as well as that of cultures, societies and individuals.

The impact of globalization has been enormous. Daily transactions of foreign exchange clocked around $1.5 billion even a couple of years back and the trend have remained upwards. Transaction of goods stood at around $8.9 trillion and services provided were worth around $2.1 trillion during the same period (Hill 2009). This aptly demonstrates the impact globalization can have and the value it can create.

Benefits of globalization

Though criticized, there can be no denying the positive impacts of globalization on countries. Global economy has undergone a transformation post liberalization and globalization. Today there is enhanced movement of goods and services across international borders leading greater currency exchanges, free movement of capital, human resources and information. The concept of integrated global economy has arisen out of globalization and this has resulted in strategic changes within businesses also. Companies no longer depend only on the domestic market but have also the international markets to tap into and grow their business (Muhammad, et.al. 2011). This has enormously helped companies achieve growth and sustainability. This was not possible in the past due to barriers to international trade being put in place by many countries. This was mainly to protect the domestic industry. But with liberalization these barriers were removed through economic and market reforms and easing of loan availability. This helped companies to expand and increase their business volume. It also provided companies of the developed nations to with an option of cost rationalization. Companies increasingly started outsourcing work to labour in developing nations as manpower costs were lower in such economies. This created job opportunities in developing countries and helped companies of developed countries reduce their costs. It was win-win for both economies. (Hamdi 2013). Also since manpower movement is high in this age, professionals are able to achieve better career growth by moving into international markets. Such professionals also gains economically through such movement. This would surely not have been possible with rigid international boundaries. Benefits of globalization have also percolated to the level of health of education. With increased opportunities per capita income has increased over the years. Thus the quality of education that people can afford and that is being provided have both enhanced. This has brought about a qualitative change in the sector. Internationals student exchange has increased leading better opportunities for student and increased revenue for the institutes which they use for upgrading infrastructure (Hamdi 2013). Access to quality healthcare has increased as a part of better lifestyles and living standards. Increase in national capital has enabled governments to provide better healthcare facilities for citizens and therefore quality of life has improved.

Criticisms of globalization

Though globalization has brought about overall economic development, it has had some serious impacts also, highlighted by critics. According to opponents globalization has widen the gap between the rich and poor nations. While the Indian economy has grown, many nations in Africa still continue to live in poverty. This highlights the unequal impact of globalization (Hamdi 2013). Some economies have benefitted while others have not. Nations with lower manpower costs are often exploited with labour being paid minimal wages. Per capita income in such countries suffers and so does quality of life. Such outsourcing also leads to increased unemployment in the parent country which is not desirable. As companies make beeline for developing countries, environmental degradation becomes a reality and governments struggle to maintain balance between development and environment protection. Cross infection is another problem of the free movement of professionals that globalization entails. Disease spread is more common now than it was previously. And the increasingly mobile workforce is surely contributing to it. This leads to increased medical expenses for many nations and can stretch the state exchequer for developing and poor nations. Associated with the aspect of labour mobility is the issue of brain drain that many countries are facing. As workers migrate a shortage of manpower in created and nations find it difficult to find the right resources internally (Hamdi, 2013).

The Australian situation

For Australia the impact of globalization has been checkered. Freeing of the economy has impacted the economy positively but some aspects are not too favourable. Australian exports have significantly risen of the years. During the first decade of globalization, export as a part of GDP rose from 32% in 1975 to around 48% by 2000 (ABS 2000). And exports still continue to be a mainstay of the Australian economy. Protection provided to manufacturing industry was reduced from 15% in 1990 to 6% by 1997 and this lead to increased production and better trade balance (ABS 2000). This brought about a shift within the Australian economy as manufacturing and service sectors become important contributors. But the export oriented economy has made the Australian dollar more volatile and dependent on performance of other economies. Uncertainty in the American markets results in investments in Australia and stability in America sees investment rise there and fall in Australia. The dollar also fluctuates accordingly (MacFarlane 2000). This is not healthy and its serious implications were seen during the meltdown of the US economy. Among the other impacts increase in unemployment due to outsourcing of work to developing nations and brain drain due to the recovering dollar are impacts common to many other nations (Stokes, 2000). But one aspect that observers point that inequality has increased within Australia post globalization. While real income has increased the difference between rich and poor has not bridged (Barrett, et. al., 2000) and therefore some people are better off than others. This is a concern for the Australian government.

Impact on individual, organization and community

For the individual globalization means increased mobility and choices. As a consumer he has more choice at competitive prices while as a professional he has more opportunities for career growth. He is free to migrate in search of the same if the domestic market fails to provide him the same. His disposable income is significant and hence he can afford better lifestyle and living conditions. For an organization globalization interprets as more market opportunities. Domestic markets are no longer the only markets they concentrate on. Companies are expanding into international markets and growing their business. They are being able to optimize costs by tapping into the resource pool of developing countries to increase profitability. But they are also adding to domestic unemployment which is not encouraging. For communities globalization means greater interaction and exchanges with other cultures and practices. This had led to enriching of communities fostering greater understanding and appreciation. But erosion within communities is also a fact. Many members opt for other cultures and enjoy communities are seeing steady erosion in their numbers. Languages are undergoing transformation due to global exposure and many countries are apprehensive about decay of their customs and traditions are mixed culture becomes the norm of community life.

Conclusion

Hence it can be concluded that globalization has been positive and has also had significant impact on world economies and communities much like that in Australia. Reaching a certain conclusion about whether globalization is good or bad is difficult. Governments and institutions will therefore have to strive to balance both aspects to garner maximum value and benefit from this global practice.

References

ABS. (2000). Use of the Internet by Householders. Australian Bureau of Statistics Report.

Barrett, G. F., Crossley, T. F, & Worswick, C. (2000). Consumption and Income Inequality in Australia. Economic Record. 76 (233), pp. 116-138.

Hamdi, F. M.  (2013). The Impact of Globalization in the Developing Countries. Developing Country Studies. 3 (11), pp. 1-4.

Hill, C. W. (2009). International Business. New York: McGraw-Hill. na.

MacFarlane, I.F.  (2000). Recent Influences on the Exchange Rate. Reserve Bank of Australia Bulletin. December.

Muhammad, A. C., Muhammad, A. F., Muhammad K. B. D, & Iqra A. (2011). Globalization and its Impacts on the World Economic Development. International Journal of Business and Social Science. 2 (23), pp. 291-195.

Rothenberg, L. E. (2003). Globalization 101 The Three Tensions of Globalization. New York: The American Forum of Global Education. na.

Stokes, A. R.  (2000). The Nature of the Global Economy and Globalisation. Economics. 36 (3), na.