3_Globalization

3_Globalization

1. Impact of Globalization

   • Economic impact
     • Negative
       • Talent
         • Countries with advanced economies are searching the world for new talent pools
         • People who are highly skilled are highly in demand
         • Increase in worker's mobility may lead to brain drain situation
         • A country may lose highly-skilled people to another country that offer better opportunities
           • Lead to shortage of skilled workforce in affected countries
             • Affected countries may find it difficult to attract foreign investments
               • Lead to economic slowdown
       • Widening income gap between rich and poor countries
         • TNCs are from developed countries
           • Draw investments,skilled people and resources from poor areas and relocate them in other regions that benefit them
             • Thus, more developed countries experienced rapid economic growth as they are responsible for most of the manufacturing countries
         • Developed countries have lowly skilled workers
           • Capable of producing better quality goods that fetch higher prices like developed countries
             • Face trade restrictions put up by developed countries
         • Many developed countries find it difficult to attract foreign investments
           • Due to poor infrastructure and political instability
             • Hence, trapped in poverty cycle
         • Spread of poverty in many countries
           • Poorer countries mat face problems like increase in crime rates