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The Effects of Globalisation on Developed Economies

Developed countries throughout the world express varying levels of concern about the affects of globalisation on their economies, and while these concerns aren’t necessarily grounded in fact, it is clear that the effects are sometimes positive and sometimes negative – and the same can of course be said for developing countries too.

First, globalisation is a result of two elements; increased movement (freedom of movement), and free trade (internationalisation of industries and corporations). They both have their own impacts:

Freedom of Movement

Freedom of movement allows workers from many different countries to come together to fill a demand for labour in a marketplace. This freedom of movement means that economies are less limited now in their ability to compete in a wider range of industries, but on the flip side it can also a depreciative affect on wages and therefore productivity.

Free Trade

Free trade allows businesses more leeway to compete on an international level, with countries reaching agreements on providing companies from different nations with access to certain industries. This can create greater competition in a marketplace and help with bringing in much needed investment, but it has also seen the widespread exploitation of groups of people who have little bargaining power in the face of multi-national corporations.


Globalisation has an affect on developed economies, such as increased investment, introductions to new markets and cheaper goods in stores, but it has also resulted in worker’s pay getting undercut by areas with cheaper labour. Although this is unfortunate, it is also unavoidable, and discussions on the matter are merely a discussion on what degree they embrace the change. It is inevitable that when the pie is divided amongst all the recipients (countries), the size of the portions will begin to be more equitable in nature.