The Impact of Globalization on Germany
The wealthy economies have always benefited economically from globalization. From various angles, Germany has benefited from the advantages of globalization. The nation benefits from cutting-edge technology, which aids in its industrialization. It has a comparative edge thanks to effective communication technology, making it a significant exporter of high-end electronics, electrical appliances, and telecommunications equipment. Because of the broad global market and its greater population of consumers, Germany's export volume has remained high. German businesses are utilizing the most recent management techniques, such as offshore and outsourcing, to increase the productivity and GDP of their nation. The world has become a global village owing to the efficient air, sea, and rail transport systems. As such, immigration is an emerging crisis that Germany has to bear with. Existing and future prospects of pollution as a result of industrialization pressure, dumping of wastes, and overstretched social amenities are real impacts of globalization that are evident in Germany. Domestic companies are facing stiff competition from established multinationals, the indigenous vibrant culture is steadily dying out, and the demographic patterns are slowly changing. Socio-political ills such as radicalization have heightened racial and religious tension that poses economic and political challenges to Germany. Consequences of globalization are, therefore, mixed, but real all over the world.
Impact of Globalization on Germany
Germany has experienced phenomenal economic growth since the 1990s due to globalization. According to the European Union economic progress, Germany has sustained a current account surplus. While it is an industrialized nation, the global market, technological changes, climate, and environment factors have significantly influenced its economic expansion. Germany has a tight-knit interconnection globally and this has enabled its industries to benefit from a wider demand and a relatively cheaper labor. According to latest Cologne Institute for Economic Research (IW) research findings, value added industrialization improved by an estimated 37% from 1995 to 2012. This trend has been consistent since Germany opened up to the world markets (Wang, 2014). Since Germany is a strong exporter of final goods such as cars, electronics, medical equipment, and other durables it has gained from global value-added chain. In fact, Germany takes a larger portion of EU industrial productivity, as it enjoys a greater international market presence. Most importantly, the German import volume has hit higher limits due to the extensive sources of input factors around the world. Value creation activities of Germany's high technology firms are geographically dispersed due to free market conditions that globalization has provided. For instance, the Volkswagen company has several assembly plants all over the world. The result is cheaper labor, closeness to market from host countries, and comparative advantage in terms of input factor. Besides, technology transfer has given it an economic foothold in the developing and emerging economies (Torp, 2014).
Multinationals are the beneficiaries of the expansive product and services markets. Germany boasts the most successful multinational corporations that include Allianz, BMW automobile, BASF, Bayer, and others that have secured various market segments globally. Labor mobility has become even easier due to flexible cross border rules, therefore, giving Germany the advantage to outsource human capital.
The robust capital mobility that globalization has brought is a boost to Germany that requires heavy financing for its industrialization. In fact, extensive foreign direct investments that Germany has channeled in offshore accounts and in the developing countries in parts of Asia, North America, and the rest of the world, are contributing towards its relative high income per capita, low unemployment rate, and political influence. Besides, the competitiveness of Germany in international trade is a function of the quality standards set by liberated consumer community (Wang, 2014). The economic shifts that developing economies rise have seen enlists the technological transfer and human resource consultancy of German people. This is evident in the 1995 data of Germany during which developing countries accounted for 25% of its total exports. The German population has equally gained through the wider variety of low-cost goods sourced from all over the world (Beck & Klobes, 2005).
German transport sector has recorded unprecedented growth in the last 10 years. Since it is the economic powerhouse of Europe, the country has also become a popular tourist destination, thereby, increasing its investment in air travel, rail, and roads. Courtesy of globalization, airline companies like Lufthansa fly to multiple destinations across Europe, America, and parts of Asia, hence, extending the German trade volume, cultural influence, and political mileage. The travel and hotel industry have expanded as different nationals throng Germany to explore its rich historical heritage. Free trade within the European zone is an additional recipe to German regional trade and such economic unions are attributed to globalization (Wang, 2014). Cargo ships have surged with significant investment in container management, logistics, and fuel consumption.
Immigration and Cultural Challenges
Globalization has opened up traditionally protected geographical boundaries. Mobility of people across continents has been on the upward trend since the advent of international interdependence. As much as Germany enjoys competitive technology and wider market, its domestic industrial profit is thin owing to high wage rates (Tripartite Meeting on the Social and Labour Impact of Globalization in the Manufacture of Transport Equipment, 2000). In a twist of economic round about, globalization pushed immigration to greater heights. Germany has, therefore, noted a significant fall in middle and low-skilled manpower wages. However, all is not well with the unprecedented influx of refugees and political asylum seekers from Syria, Iraq, Libya, the larger Middle East, and other warring zones in parts of Asia. As it can be noted, cultural structure of the Germany society is slowly getting displaced. It is, therefore, clear that outside the economic spheres of globalization, immigration is a contentious issue.
Germany has had to spend more on humanitarian services for refugees, open up its borders to unsuspected radicals, and suffer from terrorist attacks. International refugees and immigrants conventions that are associated with the pressure of globalization are eating into the cultural fabric of native Germans (Torp, 2014). The exponential immigrant population in Germany since 1990s has progressively yielded cultural homogeneity. There is a growing fear of identity loss which steadily leads to xenophobic reactions. Germany has been a victim of frequent terrorist attacks which is attributed to immigrants (Torp, 2014). Globalization is, therefore, costing Germany internal peace and creating religiously-motivated intolerance.
Environmental Challenges
Technological explosion is a factor to the intense industrialization of Germany. However, at the backdrop of such robust industrial productivity lies the threat of pollution and global climate change. The extensive transport network and the larger automobile presence have significantly added to the carbon emission (Torp, 2014). Population expansion is straining local resources that include sewage, water, and sanitation. The humanitarian crisis is a problem that Germany has had to contend with since the displacement of people from civil uprisings in the Arab world.
It is worth concluding that globalization has broadly benefited Germany in trade and politics. However, negative externalities such as immigration crisis, pollution, cultural erosion, and acts of terrorists are the consequences to bear (Beck & Klobes, 2005). In essence, globalization constitutes a complex network of relations among countries that facilitate political interdependence, economic cooperation, and social integration. Germany has a relative economic advantage owing to the wider demand for its products in the global market.
References
Beck, S., & Klobes, F. (2005). Surviving globalization?: Perspectives for the German economic model. Dordrecht: Springer.
Torp, C. (2014). The challenges of globalization: Economy and politics in Germany, 1860-1914. New York, NY: Berghahn Books.
Tripartite Meeting on the Social and Labour Impact of Globalization in the Manufacture of Transport Equipment. (2000). The social and labour impact of globalization in the manufacture of transport equipment. Geneva: Internat. Labour Off.
Wang, J. (2014). Globalization of leadership development: An empirical study of impact on German and Chinese managers. Bayreuth: Springer Gabler.
