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Economy: Effects of Globalisation

Introduction

Globalisation and post industrialisation are terms used to describe changes in nature of economic activity, globalised markets, growth in the service sectors and increased levels of productivity. Work in the current economy stimulated by globalisation seems to be different as compared to the old economy. New economy has brought about the invention of information and communication technologies (ICT) and easy circulation of information which has changed and created value to businesses. The new technology which globalization has brought about has increased the production of capital goods, stimulated capital investment and encouraged small firms to substitute capital for labour which has greatly influenced globalisation of markets, change in nature of work and increased the need for workers’ education and training.

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Training offered in organisational basis can be both formal and informal. Participants are subjected to different levels of education depending on their personal preference, skill level of their education and family responsibility. Employers also influence employees on the kind of training to undertake. For instance, private and public sectors have different specifications, firm size may also influence and industry sector. Individuals who undertake training benefit from higher wages as the new technology appears to attract wage premiums (Ryan & Watson 2003, p.7).

Employers offer training to employees to improve job performances and quality of goods and services. Training is motivated by technological change. When employers offer training to employees, it directly or indirectly increases competition pressures, stimulates introduction of new technologies, introduces quality, centralises decision making in the organisation and increases work-reorganisation process. Investment in training activities stimulates higher levels of work productivity in many organizations and industries. New economy means additional training activities which individual employees may find it hard to afford (Ryan & Watson 2003, p.7).

Main Text

Information and communication technologies (ICT) have not shown uniform results on the nature of work in all occupations. For instance, the use of information and communication technologies in hairdressing occupations has only streamlined management information systems and put less emphasis on occupational change. ICT has positively influenced printing and library occupation as the standards and nature of work have increased tremendously in the sense that;

  1. adoption of ICT as diffused in organisations has delegated traditional jobs to clients themselves. Such duties include photocopying, internet search engines, pre-press work and libraries. Traditional jobs have transitioned to become multi-tasked and lessen the time spent on one particular task rendering some workers jobless.
  2. The emergence of electronic technologies have expedited the computerisation of production processes in printing areas and libraries thereby relinquishing traditional trade skills and other occupation duties supersede.
  3. Workers have been forced to poses basic clerical skills and computer skills since most of the duties are computerised.
  4. ICT has made boundaries of many occupations befog.

Globalisation has influenced the nature of work by developing new products and has facilitated production processes. Products developed from new technologies include internet databases and computerised printing presses. ICT has increased the speed at which processes and new products are developed and workers are forced to adopt to the changes being introduced. This meant that more sophisticated work was done easily and in less time as compared to the past (Ryan & Watson 2003, p.8). Through globalisation, enemy nations can easily spread propaganda through internet (Pillai 2008, online).

Education and training in the changing nature of work has revealed that ICT development has not provided uniform results across all industries and occupations because; a). Industries that concentrated on mass production process were mostly computerised and therefore workers require knowledge to effectively manage production and have the skills to solve problems of variant nature. B). workers need to learn new products and process before carrying out certain tasks c). Communication skills are highly valued in all organisations and occupations as interaction between workers and supplies has increased. Essentially, computerised skills has increased productivity and succumbed many aspects of production processes. Nowadays, many occupations require employees to have minimum education on production processes, acquire high level problem solving skills or cognitive skills, communication skills and basic clerical and computer skills as required by most jobs (Ryan & Watson 2003, p.18).

Globalisation is believed to be breaking down boundaries between nations, social classes and people while providing a flexible pathway for economic development that will improve the quality of life and raise living standards. It has replaced the old-fashioned state bureaucracy with a spontaneous global division of labour facilitating economic niche. Economic globalisation has stimulated ICT development characterised by creativity, flexibility and powerfulness and negatively transformed the economic sector beyond the power of human beings control as some of the incidents are inevitable. Globalisation has grown to be resistant making the new form of integrating global capitalism completely unanticipated.

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This resistance has challenged the premises of economic as there has been an increase in income and wealth inequalities within countries since globalisation. Health inequalities have also been experienced within certain regions. Reports indicate that there has been a decline in population health since globalisation. There has also been reduced quality and access to education, human services and health care. Public utilities that have taken place in certain regions of the world as a result of commercialisation and privatisation have compromised quality of services. Processing sectors have been subjected to stressful and hazardous work conditions due to globalisation such as the export processing zones (EPZ) all over the world. Also, there has been crisis in the global governance as a result of withdrawal of the regulatory and protective nature of the national state and the up-rise in power of trans-national corporations (Johnson 2008, p.3).

Johnson (2008, p.3) argues that impact of globalisation has brought about persistence problems affecting the economic sector. From this statements, its evident that globalisation is fragmented, contingent, incomplete and a puzzling process. This is because organisation trends have been un-uniform in most occupations. From political economic policy perspective, globalisation has influenced both ideology and political economy regime, a term known as neoliberalism. Neoliberalisation fostered understanding and established new set of rules for the global economy as a result benefiting transnational corporations and the economic nobility. Neoliberalisation was earlier intended to achieve the restoration of class power but it brought trans-nationalisation of classes. These divisions formed new social hierarchies and inequality among people as they were driven into trans-national class relations.

Historically, divisions of classes meant workers were attacked in their workplaces and their protection and rights abused. Economic globalisation as a real force and ideology has stimulated the emergency of new business opportunities on national and international levels to a paramount class position from the past monopoly capitalism. The globalisation of economy has greatly impacted the dimension of work place such that many workers have been exposed to hard and longer working conditions for less compensation as it was in the past. This has made workers loose power over their daily lives as most of the activities are centralized in workplaces, society and globally. This isolation has made workers feel isolated and unprotected by ancient collective solidarity (Johnson 2008, p.5).

Post-industrialisation has replaced traditional men’s work with service economy. These changing social and economic relations in workplaces have left men confused about their work related identities and their roles in the society. Men always want to feel masculine, in charge and dependable. Globalisation has therefore challenged their identity in the society as a whole. Modern men are experiencing identity confusion which increased the numbers of young male depression and suicidal rates and the rise of anti social behaviours. Researchers reveal that men have been worst affected by changing economic conditions. For example, the replacement of Britain’s heavy industrial base to service sectors increased unemployment rates among working class men. According to the 1997 film, “The Full Monty”, men who used to work in factories struggled to find their way into the light of a new economy (Archer 2003, p.8).

Due to large scale technological development brought about by globalisation, demand for unskilled labour has reduced as foreign investment has concentrated more on highly skilled workers. Tradition nature of work has diminished due to increased use of technology subsequently creating new and innovative occupations due to highly specialised professions in the new workplaces. Developing economies which were not unable to adopt new technologies experienced increased unemployment rates due to lack of new job openings and the decline in wage rates. Also, if the labour clause will be effected through the WTO, developing countries will experience negative impacts on the economic growth and employment rates especially in areas where child labour is prevailing and employees work under poor working conditions. Globalisation is not equally distributed in the sense that manufacturing-producing countries (developed) benefit more on trade liberalisation as compared to agricultural-producing countries (developing) who receive the smallest share. The emergence of privatisation has increased unemployment rates since its characterised by reduction labour demand as compared to public sectors (UNIFEM 2009, online).

The credit crunch experienced in 2007 to 2008 was influenced by globalisation and the worst affected areas were real state businesses in the sense that capital availability and flows within and outside economies were affected. Governments cannot fully control use of capital within their borders and they cannot also put aside their money supply from the implications of foreign capital. This means that a country cannot effectively control money supply outside its economy thereby contributing to credit crunch. Essentially, a country cannot stop foreign capital investment as investing countries would shift to other markets (Downs 2008, p.1).

Globalisation has brought about electronic commerce where customer services operate on 24-hour basis which required redistribution of jobs thereby creating additional workload. Electronic commerce also offers teleworking which reduces social interactions among workers, mixes up family and profession activities. Workers are interrupted at work for domestic chores, exposed to long working hours, experienced difficulty in maintaining company culture and formation of teamwork within the organisation. Tele-working has also been able to positively increase the flexibility in selecting time and place of work, reduced office operations costs and saved workers time from commuting as work is centralised contrary to earlier implications (International Labour Organisations et al 1999, p.63).

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Trade union memberships are lower in small enterprise sectors where there is a high population of female employees. These sectors are characterised by high labour turnover rates and high proportion of workers are neither employed on full time nor permanent basis. The most affected industries are retail and wholesale trade. Unions are slowly losing members in developed countries meaning that workers rights are not adequately addressed. Globalisation has influenced offshore contracting which has greatly contributed to the decline of unionisation rates in clothing industry in the United States. This international subcontracting has subsequently affected union membership in low skilled production jobs in develop countries exposing workers to substandard working conditions (International Labour Organisations et al 1999, p.76).

In order for farmers to take advantage of niche markets, they need to be educated on specific quality traits, be informed on the comparative advantage in producing certain products and able to learn efficient and effective means of supplying the products. They should also learn how to arrive at economies of scale by working through cooperatives so that they can provide consumers with high quality products. Globalisation has stimulated public research which has assisted farmers on knowledge to help them survive in this emerging global economy. The disadvantage of this system is that the service provided is outreach for small scale farmers in developing countries, therefore workers may not benefit at all. Privatisation of public sectors reduces reliance on Extension and companies become more depended on private technical consultants which are very costly. Since public sectors have no access to information, it has become difficult for workers and firms to conduct resource inventories, able to undertake policy analysis and detect market failures in time (Reddy 2007, p.6).

Globalisation has had negative implications for women in developing countries especially in the African and Asian culture. International corporations on the other hand have become richer as the days go by. The worst affected population are women as they are exposed to longer working hours with meagre salaries. Research reveals that about two thirds of women are subjected to harsh working conditions and only earn 10 percent of the World’s income and own minority of world’s property. Indian ecofeminist reports that globalisation and organisations such as World Bank and IMF have devised wage packages known as slave wages. He argues that these packages were created because global trade looked down upon the importance of people’s lives and work with emphasis on women.

In economic stimulus package, globalisation penetrated the rural areas for job developments with little effect. India for instance has been experiencing no employment in the rural areas; therefore development will greatly impact the lives of this people. The jobs allocated to women are always poorly paid, insecure, physically unhealthy, mentally challenging and degrading. Women actually suffer two fold; first, they are not relieved of their domestic responsibilities and second, they work in factories where payments are pathetic. This meant that globalisation increased the migration of men into cities, poor job opportunities and higher prices for goods and services which the poor could not afford. Also the mixture of corporate capitalism and Western culture models has crumbled family and community social controls as evidenced by high rates of family breakdown, rape, violence and divorce cases (Global 2009, online).

Noida Export Processing Zone suited in New Delhi has a high population of women workers as they are preferred to be more productive, easier to control and less likely to rebel against poor working conditions. Noida Zone is hot and unsanitary with no maternity benefits and no minimum wage and women who get pregnant or marry are fired immediately. Overtime is compulsory and no extra payments are awarded for extra hours and men are paid higher than women. In order to maintain their positions, women turn to unsafe abortions. Workers exposed to diseases such as anaemia, pelvic inflammatory diseases, dehydration and respiratory problems and the management does nothing to offer medical support (Global 2009, online).

Globalisation has made communication easier with the invention of mobile phones and internet access. Goods that were once confined to specific regions can widely be found across the globe and work can be outsourced to any part of the world through internet connection. There has also been improved infrastructure which has facilitated faster travelling. Developed countries have outsourced most white collar and manufacturing jobs to developing countries like China and India saving on the cost of manufacturing goods. Examples of outsourced jobs are accountancy, editors, scientist and programmers and many workers in developed countries have lost their jobs as a result of this. Globalisation has also exploited labour conditions subjecting prisoners and child workers to inhuman conditions. Industries ignore safety standards in order to produce cheap goods.

Before globalisation, people were stable and job opportunities were permanent. Since globalisation, people live in fear as they are likely to loose their jobs to competition. Increased job competition subjects employees to lower wages thereby lowering their living standards. Industrialisation has developed sophisticated weapons subsequently increasing terrorism activities as these weapons have enhanced their ability to induce damage. Also, Internet access has enabled terrorist easily communicate with their counterparts. Many industries have been set up causing pollution resulting to global warming. Benefits of globalisation are not uniformly distributes as the rich are getting richer while the poor are becoming poorer each day. The development of TV and Internet are spreading immorality from foreign cultures demoralising local cultures. The emergency of fast food joints such as McDonald’s and KFC are spreading their wings to developing countries making people consume more junk foods exposing them to health risks (Pillai 2008, online)

Developed infrastructure has enabled faster travelling across different continents. Spread of dangerous diseases such as HIV/AIDS have been on the rise since good infrastructure enables travellers to move around the globe. Globalisation has enables foreign multinationals to take over local industries creating employment scarcity for unskilled workers. Human trafficking has been on the increases in search for better lives. Rise in commodity prices in developing countries has weaken government ability to control social welfare schemes. Multinational companies and corporations are moving away from commercial activities to influencing political decisions (Pillai 2008, online).

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Conclusion

In conclusion, globalisation has greatly benefited mankind and one should not ignore its negative effects. The concept of outsourcing has opened job opportunities for people of developing world improving their living standards. Increased competition stimulated by globalisation has forced companies to lower prices making commodities affordable mostly to developing countries. ICT has increased media coverage thereby putting to spotlight human rights violation subsequently improving human rights.

Bibliography

Acher, L. 2003, Race, masculinity and schooling: Muslim boys and education, Mc-Graw-Hill International.

Downs, A. 2008, ‘Securitization Hibernation, National Real Estate Investor, p.1.

Global 2009. ‘Negative effects of Globalisation’, Web.

International Labour Organisations, Sectoral Activities. Programme, & International Labour Organisation, 1999, Human resource implications of globalisation and restructuring in commerce: report for discussion at the Tripartite Meting on the Human Resource Implications of Globalisation and Restructuring in Commerce, International Labour Organisation, Geneva.

Johnson, J.V. 2008, ‘Globalisation, workers’ power and the psychosocial work environment-is the demand-control-support model still useful in a neoliberal era?’, SJWEH Suppl. 6, pp. 1-7.

Pillai, P. 2008, ‘Negative Effects of Globalisation’, Web.

Reddy, D. E. 2007, ‘Impact of Globalisation on small Farmers worldwide: Implication on Information Transfer’, WLIC, pp.1-7.

Ryan, C. & Watson, L. 2003, ‘Skills at Work: Lifelong Learning and Changes in the labour market’, Commonwealth of Australia, 03/14, pp.1-105.

UNIFEM. 2009, ‘Globalisation and The Labour Markets: Research on Globalisation and Women’, Social Research Centre, Web.

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StudyCorgi. (2021, November 19). Economy: Effects of Globalisation. Retrieved from https://studycorgi.com/economy-effects-of-globalisation/

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