The Costs & Benefits of Globalisation to the UK

By: Sarah_Jones

Globalisation is a capitalist process that has taken off as a concept in the wake of the collapse of communism as a viable alternate form of economic organisation as we are increasingly been seen as living in the era of globalisation. Globalisation describes the increased mobility of goods, services, labour, technology and finance & capital throughout the world. Although globalisation is not a new development, its pace has increased with the advent of new technologies, especially in the area of telecommunications.

Examples of how globalisation effects Britain is in the current trend of UK business employing indian call centres for support & sales services, or for a clothing manufacturers to design its products in the UK, and make them in south-east Asia and then to sell them in north America.

The Costs of Globalisation are -

• The wages in the UK are high in global terms, and thus the UK is unable to compete in many sectors such as manufacture of consumer goods or other goods where the labour costs are a significant element of the price. Thus British workers are losing their jobs when companies move abroad or fail to compete.
• Open to risks outside of the control of the UK government , i.e. International capital flows and crisis.

The Benefits of Globalisation are -

• English is the language of the internet and international business & commerce, giving the UK a head start against the likes of France in developing ecommerce businesses and services.
• Globalisation has helped to elevate London into the worlds financial centre for the European Time zone. With a large and wide ranging financial services sector including banking, insurance.
• A large number of UK companies sell overseas for which 'Britishness' is part of the appeal
• UK Educational institutions benefit from many overseas students.
• Availability of a wide range of produce and goods to the UK consumer at low prices.

Steps to Counter the negatives of Globalisation -

• Increasing skill levels of the workforce to raise productivity
• Develop a modern industrial strategy for the global market place
• Securing UK energy supply and investing in sustainable renewable energy technologies
• Improving transport links in growth areas of the country.
• Investing in new science and technology.

In conclusion, the average family in the UK is some £7,000 per annum better off, due to reduced costs for goods and services due to the impact of globalisation. This has helped to sustain an record period of economic growth and prosperity within the UK. However the costs will be bourne in future years as wages inevitably converge lower towards the east asian wages for competitive reasons. I.e. when a high paying manufacturing job is lost, it is likely to be replaced by a lower paying service industry job.

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.