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What Is the Relationship Between Globalization and Economic Development?

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  • Written By: Esther Ejim
  • Edited By: Kaci Lane Hindman
  • Last Modified Date: 05 April 2014
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Globalization and economic development are related in several ways. Globalization may be said to be a catalyst for the growth of the economies of several nations. Increased movement of people across territorial borders means that there is a cross transfer of knowledge, expertise and labor. Cross-border trade means that there are more opportunities for the sale of various goods and services. Globalization has also led to the accessibility of various technologies from various countries of origin by other countries to their benefit.

One of the links between globalization and economic development is the fact that people from different nationalities now find it easier to go to other countries in pursuit of livelihoods, careers, trade and other purposes. These people bring with them much-needed expertise, knowledge or labor, which the host country can use to its own benefit and economic development. For example, some countries that need skilled engineers, nurses, doctors and architects may benefit from immigrants of other countries who possess these skills. There is usually a shortage of skilled healthcare professionals in most countries and such people are often given more consideration in terms of immigration policies. These people help develop the economies of their host countries through the use of their various gifts and expertise.

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Another relationship between globalization and economic development is that it has led to the increase in trade between various countries. It has made it possible for a country to sell its goods and services to countries located in different corners of the globe and for that same country to purchase needed goods and commodities from other countries. For instance, countries in the west that do not have crude oil can purchase the commodity mainly from countries in the Middle East and Africa that have huge reservoirs of oil deposits. The countries selling the commodity can benefit in terms of increased financial resources.

The relationship between globalization and economic development can also be seen in the manner in which globalization has led to a transfer of technology between several countries. For instance, due to the effects of globalization, new technology from the United States will also soon be available in other countries, which will be able to benefit from it. An example of such a technology is the development of different brands of smart phones that soon become available to other markets as soon as they are released into the US markets.

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