Although globalisation is not a new concept with continents trading goods for thousands of years with various developments such as the Silk Road and the East India Trade Route (Green, 2012), it is still one of the largest affecting factors in modern day life. However, even though globalisation may be such a key factor of 21st century life, the concept on whether Australia has benefited from it and is still benefiting requires the different positives and negatives of globalisation to be weighed up against each other.
Globalisation benefits and disadvantages Australia as a nation through the means of trade, investment, technology, finance and labour. Through globalisation, multiple advantages and disadvantages in relation to trade have affected Australia. To start off, an advantage is that Australia has had the ability to trade its natural resources in return for needed resources. However, in modern society, it seems that the trading for resources that are available in Australia is cheaper off-shore, therefore affecting the economy in Australia.
Although this results in a decrease in economy and business in Australia, tariffs have been included so that a preference to buy in Australia is made. In conclusion, although trade in Australia has been affected by multiple disadvantages as well as advantages, overall, globalisation has helped Australia in relation to trade. Continuing on, investment in Australia has helped, but at the same time hindered development in Australia. To start, international investment has helped Australia’s economy with international countries being able to invest in Australia’s economy.
However, this meant that Australia’s economy relied partly on the economy and wealth of other international countries, but since Australia’s economy also had multiple investments in different countries, it still will be able to stabilize itself in an economic crisis. Therefore, even though there are disadvantages in relation to globalised investment to Australia, they came be overcome via different solutions. In relation to globalisation, technology has affected Australia both positively and negatively.
To start off, improved communications and technology and a high take up rate by households and businesses have improved productivity (which in turn increases growth). In addition, technology has also changed the structure of our economy, in terms of it being more service based, and more capital intensive This makes it easier for our exports to be marketed and sold throughout the world via the internet. However, lower inflation levels and lower consumer prices since there is a lot more import have affected the Australian economy.
Thirdly, finance in Australia has helped, but at the same time hindered development in Australia. With better and easier access to finance, through globalisation, Australia has experienced rapid growth. In addition, the government has increased competition with the introduction of non-banking financial institutions, resulting in the difference between mortgage and cash rates dropping dramatically. Finally, one of the largest impacts to Australia through globalisation has come through labour.
To start off, labour has allowed Australian citizens to buy and distribute products cheaper, but this means that Australian factories and industries has taken a hit because of cheaper labour in Asia and Africa. In addition, unemployment has raged in Australia since large companies can pay workers up to ten times less money than in Australia. In conclusion, globalisation has both positively and negatively affected Australia through the factors of trade, investment, technology, finance and labour.