Advantages and Disadvantages of Globalization and the Influence of COVID-19

Globalization processes have a significant impact on the conditions of national and global markets and their participants. With the development of digital technologies and the spread of e-commerce, the share of exports and imports in various states has increased significantly, and international transactions have expanded. These tendencies allow even small and medium-sized businesses to enter the international arena. At the same time, multinational corporations tend to have offices on all continents and may be comparable in the number of employees to some countries’ populations.

Globalization is creating new market opportunities, increasing economic linkages between nations, and creating jobs in developing countries. However, it can lead to the exploitation of poor people and adverse effects on the environment. Globalization of the world economy causes states to integrate with each other because of the operational ties of production, creating favorable and competitive conditions. In addition, the economies of different countries are becoming linked by the demand and supply of a single global consumer market, which is becoming increasingly unified.

For example, the demand for technology is greater in countries where the middle class is more stable. China is creating a considerable share of these products, thus meeting the needs of multiple nations around the world. It should be noted that often one production chain goes through several states. For example, the first state provides resources that are processed in the second. The third state creates a product and gives it to distributors all over the globe. Obviously, these trends create a certain interdependence of different national economies. Typically, in the event of a severe financial crisis in one state, many related economies will also be affected by it.

This is particularly evident in the context of the COVID-19 pandemic, and researchers predict severe socio-economic consequences for all states. Even if some states avoid the mass spread of the virus on their territory, they will not prevent adverse economic effects since the global financial crisis could become a significant threat for them. At the same time, global “scientific collaboration” is a result of economic globalization, and it provides humanity with “more powerful means of fighting against coronaviruses”. Thus, the positive effects of globalization can be critical in the fight against the pandemic.