Globalisation is defined as the increasing economic integration of national economies into a single economic unit through trade, finance, investment and labour/capital flows. Globalisation has had a profound impact on economic growth (increase in real GDP) and the quality of life in the global economy. The drive for globalisation is apparent in greater economic growth globally, through increased trade flows from the opening up of barriers to international trade, increase in FDI (Foreign Direct Investment) and increase in GDP. Also the era of rapid globalisation has had both positive and negative effects on the quality of life with in a nation through measuring GDP per capita, life expectancy, mortality rates, education and HDI (human development index). Also the high levels of economic development have been detrimental to the environment with growing levels of depletion and pollution.
Globalization started after World War II but has accelerated considerably since the mid-1980s, driven by two main factors. One involves technological advances that have lowered the costs of transportation and communication to the extent that it is often economically feasible for a firm to locate different phases of production in different countries. The other factor has to do with the increasing liberalisation of trade. More and more governments are removing trade barriers and opening up their markets to the global economy.
Globalisation has had a constructive but unstable impact on economic growth around the world. This has been a result of increased trade flows between countries freely exchanging imports and exports. This has led to higher employment for trading nations, leading to higher levels of income and higher production levels which has aided in increasing economic growth. Also through FDI between nations it allows businesses to expand, purchase more resources hence assist production hence economic growth.