Effects of Globalization on Small Entrepreneurial Business in UK

¶ … Globalization on Small Entrepreneurial Businesses in the UK

Ten Positive Effects of Globalization on U.K. Businesses

Globalization has had both positive and negative effects on United Kingdom businesses. The positive effects of globalization have been found in the research in this present study to include the following positive effects of Globalization on UK businesses:

(1) Globalization broadens the access of goods and services enabling consumers and companies the ability to acquire a wider range of goods and services;

(2) Better access to external finance and enhancement of worldwide financial markets;

(3) Increase in international travel and tourism creating more opportunities for entrepreneurial businesses.

(4) Higher trade exposure and FDI inflows result in creation of new business opportunities and increasing entrepreneurial activity. (Colantone and Sleuwaegen, 2007)

(5) Intensified import competition and access to cheaper intermediate goods and wider final product markets due to more openness in trade.

(6) Immigration associated with globalization serves to change both the size and composition of the labor force and expansion in foreign communities results in the creation of a demand for new services and ethnic-specific products, enhancing the creation of new firms.

(7) Globalization "creates greater opportunities for firms in less industrialized countries to tap into more and larger markets around the world." (McCubbrey, nd)

(8) Globalization "…can lead to more access to capital flows, technology, human capital, cheaper imports and larger export markets." (McCubbrey, nd)

(9) Globalization "…allows businesses in less industrialized countries to become part of international production networks and supply chains that are the main conduits of trade."(McCubbrey, nd)

(10) Both higher trade exposure and FDI inflows imply a competitive displacement of domestic entrepreneurs, resulting in higher exit and lower entry of new firms in the short run. (McCubbrey, nd)

(11) New business opportunities are also opened up by the same international dynamics over time and may result in increasing entrepreneurial activity. (McCubbrey, nd)

(12) More openness to trade intensifies import competition and access to cheaper intermediate goods and wider final product markets. (McCubbrey, nd)

II. Ten Negative Effects of Globalization on Small Entreprenurial Businesses in the UK & Practical Examples

The positive effects of globalization on small entrepreneurial businesses in the United Kingdom have been reviewed. Negative effects of globalization on small entrepreneurial businesses in the UK have been found in the present study to include the following negative effects:

(1) The growth of international trade is exacerbating income inequalities, both between and within industrialized and less industrialized nations. (Colantone and Sleuwaegen, 2007)

(2) global commerce is increasingly dominated by transnational corporations, which seek to maximize profits without regard for the development needs of individual countries or the local populations. (Colantone and Sleuwaegen, 2007)

(3) protectionist policies in industrialized countries prevent many producers in the Third World from accessing export markets. (Colantone and Sleuwaegen, 2007)

(4) the volume and volatility of capital flows increases the risks of banking and currency crises, especially in countries with weak financial institutions. (Colantone and Sleuwaegen, 2007)

(5) competition among developing countries to attract foreign investment leads to a "race to the bottom" in which countries dangerously lower environmental standards. (Colantone and Sleuwaegen, 2007)

(6) cultural uniqueness is lost in favor of homogenization and a "universal culture" that draws heavily from American culture. (McCubbrey, nd)

Questionnaire to Measure/Test Effects

(1) Have the access of goods and services been broadened resulting in the company's ability to make acquisition of a wider range of goods and services?

(2) Has your company experienced better access to external finance and worldwide financial markets?

(3) Has your company experienced intensified import competition and access to cheaper intermediate goods and wider final product markets?

(4) Has your company experienced a loss of cultural uniqueness and experienced 'homogenization'?

(5) Have you witnessed new business opportunities open up as a result of globalization?

(6) Has your business experienced intensified competition in the global market?

Objective of Questionnaire

The objective of the questionnaire presented above is to access the effects of globalization on businesses examined in this study.