Reduced barriers to trade and communication across international boundaries have changed politics, culture, and economics across the globe. 


  • Globalization refers to the process by which technological, economic, political, and cultural exchanges make the world a more interconnected and interdependent place.
  • Although the phenomenon of globalization is not new, political, economic, and technological developments in the 1990s accelerated the processes of globalization and contributed to the emergence of a public debate about its advantages and disadvantages.
  • The effects of globalization have been uneven, with some people, industries, and countries benefiting more than others.

What is globalization?

Globalization refers to the technological, political, economic, financial, and cultural exchanges between peoples and nations that have made and continue to make the world a more interconnected and interdependent place. In the business world, this includes increased trade and investment flows, currency exchange, and the rise of multinational corporations. Communication and transportation technologies are capable of linking people who are physically distant from one another, thereby facilitating the exchange of culture, knowledge, and ideas.start superscript, 1, end superscript
Although the concept and vocabulary of globalization is fairly recent, emerging most forcefully in the 1990s, the processes of globalization are as old as history itself. This is because humans have always engaged in cultural exchange, the dissemination of knowledge, and the trade of goods and services. However, important developments in the latter part of the twentieth century, particularly the 1990s, accelerated these processes.start superscript, 2, end superscript

Globalization in the 1990s

With the collapse of the Soviet Union in 1989 and the end of the Cold War in 1991, the world became more interconnected. This is because the communist bloc countries, which had previously been intentionally isolated from the capitalist West, began to integrate into the global market economy. Trade and investment increased, while barriers to migration and to cultural exchange were lowered.
Photograph of a McDonald's in St. Petersburg featuring a sign in Cyrillic characters.
A McDonald's restaurant in St. Petersburg. After the fall of the Soviet Union, the former communist bloc nations began to integrate into the global economy. Photograph by Dirke Ingo Franke. Image courtesy Wikimedia Commons.
Technological advances, including mobile phones and especially the internet, have contributed to globalization by connecting people all over the globe. The World Wide Web links billions of people and devices, providing innumerable opportunities for the exchange of goods, services, cultural products, knowledge, and ideas.
Free trade agreements, such as the North American Free Trade Agreement (NAFTA), which the governments of the United States, Canada, and Mexico signed in 1992, removed barriers to the free flow of people, goods, and services, thereby facilitating greater trade, investment, and migration across national borders.
Though free trade and open markets have led to job losses in some sectors in certain countries, and have displaced workers in certain industries, they can also increase economic growth and prosperity.start superscript, 3, end superscript For instance, NAFTA has been criticized for moving almost three-quarters of a million manufacturing jobs out of the United States and into Mexico, but US trade with Mexico increased substantially as a direct result of the agreement.

The dark side of globalization

Although globalization has had many positive effects and has contributed to greater prosperity in many countries, it has a dark side as well. Global terrorist networks have used the conditions created by globalization to enhance their own influence and to promote a culture of intolerance and hate. For example, the al-Qaeda members who perpetrated the attack on September 11th used mobile phone technology and the internet to coordinate their plans. They were also easily able to move from one country to another because of lowered barriers to international travel and mobility.start superscript, 4, end superscript
Moreover, the increasing interconnectedness of the world economy and international finance has heightened the risk of global economic catastrophe. This is because banking or financial failures in one country will lead to crises in other countries, and thus will become internationalized rather than remaining isolated. This was the case with the Great Recession of 2008-2009, during which the financial crisis in the US subprime mortgage market led to a global economic meltdown.start superscript, 5, end superscript

What do you think?

How would you define globalization in your own words?
How have technological developments influenced the process of globalization?
Have the overall effects of globalization been more positive or negative?
Article written by Dr. Michelle Getchell. This article is licensed under a CC-BY-NC-SA 4.0 license.
  1. See Jürgen Osterhammel and Niels P. Petersson, Globalization: A Short History (New Jersey: Princeton University Press, 2005).
  2. See Manfred B. Steger, Globalization: A Very Short Introduction (New York: Oxford University Press, 2013).
  3. See Joseph E. Stiglitz and Andrew Charlton, Fair Trade for All: How Trade Can Promote Development (New York: Oxford University Press, 2005).
  4. For more, see Reza Aslan, Beyond Fundamentalism: Confronting Religious Extremism in the Age of Globalization (New York: Random House, 2010).
  5. See Karen L. Higgins, Financial Whirlpools: A Systems Story of the Great Global Recession (Oxford: Elsevier Inc., 2013), and Jeffry A. Frieden, Global Capitalism: Its Fall and Rise in the Twentieth Century (New York: W.W. Norton & Company, 2006).