Globalization is the expansion of local economies and businesses into a broader, international marketplace. Even small businesses have gotten active in the global environment as the Internet and mobile technology have enabled communication across continents and countries. Globalization has become important for a number of reasons, including the overall need for businesses to compete.
The Internet revolutionized the business arena, because it created a whole new virtual marketplace that expands beyond physical and geographical boundaries. Companies in foreign countries can now compete for customers in the United States by leveraging their own country’s resources, lower costs of labor and affordable distribution processes. In the same way, U.S. companies have the opportunity to appeal to customers in other countries by promoting goods online.
The development of business, industry and income levels in several large population centers has also contributed to the importance of globalization. China, India and Brazil are prominent examples of thriving economies as of 2013. Nearly two billion people reside in these countries. As customers gain buying power, U.S. companies race for the all-important capital that their revenue dollars can provide. Partnership opportunities with businesses in these countries can aid growth.
Even if you want to avoid the globalization movement, you often have no choice but to compete. The influx of foreign competitors in the U.S. limits the number of companies in some industries that can succeed domestically. In the same way, if your competitors expand globally, you have to consider following suit. Any money other companies make in foreign markets, they can bring back to the United States and invest it in promoting their brands, products and services domestically.
Business trends often mirror broader societal trends. The United States, and the world in general, has become very diverse. The United States is home to immigrants from many countries around the world. As people move to different parts of the world, they spread different ideas, perspective and customs. Foreign-born citizens who work for and buy from U.S. companies often want to see them get involved in doing business in other parts of the world.