Glossary term
Globalisation: Meaning and Definition
Reviewed and approved by Dr. Anamika ShrivastavaPublished Last updated
Globalisation is the growing integration of a country’s economy with the world economy through trade, investment, technology and communication, so that events elsewhere affect local conditions. It is the outcome of liberalisation and privatisation, and includes outsourcing and rules set by the World Trade Organisation.
In more detail
Globalisation spreads through trade, capital flows, migration and technology. It gives firms larger markets and consumers more choice, but it also exposes local producers to foreign competition and links economies to shocks elsewhere. Rules of trade are negotiated at the WTO and in regional agreements.
Example
A call centre in India serving customers in the United States, or an Indian company buying a firm abroad, are examples of globalisation.
Key points
- An outcome of liberalisation and privatisation.
- Brings access to markets and technology.
- Also exposes local producers to competition.
Common mistake
Calling globalisation purely beneficial or purely harmful. The effects differ by group.
Related terms
OutsourcingWorld Trade Organisation
Where it is explained
This term is explained in Class 11 Indian Economic Development Chapter 3: Liberalisation, Privatisation and Globalisation: An Appraisal.