Economic Effects of Globalization

Results of Increased Foreign Ownership

• Job loss due to foreign ownership
• Revenue generated in Canada is used to pay head office costs outside of Canada
• Challenges in research and development
• Reduced exports as a result of foreign ownership
• Economic destabilization in Canada

Globalization

• Process of integrating national or regional economies and cultures through:
  • Global communication technologies
  • Foreign direct investment
  • International trade
  • Immigration
  • Flow of money

Pros of Globalization

• Outsourcing jobs to specialize in competitive advantage
• Lower prices for goods and services
• Decrease in poverty through economic growth
• Innovation through sharing of ideas and technology
• Optimal use of resources globally
• Better job opportunities in specialized fields
• Increased capital flow between countries

Cons of Globalization

• Lost jobs due to outsourcing
• Fear of job loss and insecurity
• Loss of Canadian productivity and competitiveness
• Exploitation of cheap labor in developing countries
• Increased pollution and environmental degradation
• Safety concerns and risk of disease outbreaks
• Increase in income gap between rich and poor
• Influence of multinational corporations on governments
• Social and political issues arising from globalization
• Global financial crisis and economic instability
• Data leaks and cybersecurity threats
• Rise in populism and protectionism as a reaction to globalization

Additional Concepts

• Populism: a political approach that appeals to ordinary people who feel disregarded by elite groups
• Protectionism: the theory and practice of shielding a country's domestic industries from foreign competition through taxing imports