BENEFITS AND COSTS OF GLOBALISATION
Benefits
Businesses can make use of cheapest and best resources worldwide
Greater choice for consumers, who are able to choose products for all over the world
More innovation
Businesses selling globally, accessing more customers to boost their sales and leading to economies of scale
New technology and jobs are bought to developing countries
Falling prices due to the ability to produce in low-cost locations
Economic growth and higher standards of living
Greater political integration and stability by tying companies together
The current account of the balance of payments can be improved and AD boosted
lead to the multiplier effect, creating more jobs
Greater trade can force domestic firms more efficient in order to remain competitive
Costs
Some international firms exploit local economies in developing countries without investing heavily in them
Some international firms may exert great power and abuse their power
local and reginal brands may suffer at the hands of global brands
The ability to produce abroad ad benefit from cheaper labour and supplies
loss of jobs domestically
Control of some strategic industries may be lost
Global growth has led to greater demand on natural resources and damage to the environment
Increasing world prices
Poorer, peripheral, countries have become even more dependent on activities in central economies
A shift in power away from the nation state and toward multinational corporations (decline in the power if national governments to direct and influence their economies)
Low income families are suffering as a result of globalisation as their jobs are being taken by others, either by immigrants or as a result of activities (outsourcing)
The benefits of globalisation are not being felt by all in any country (the gap between rich and poor nations is widening)
There is an erosion of national and cultural identity