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5 Ways How Globalization Impacts Small Businesses

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globalization and small business

Globalization is the process of increased economic and cultural interaction between people, businesses, and governments worldwide. It refers to growing close relations and trade between different nations and reducing cultural and economic barriers between countries. These trade barriers have included high tariffs (import taxes), border controls, and differences in regulations and standards.

When the world gets smaller, so does business. With the rise of technology and globalization, new business opportunities are arising almost exponentially. While this is exciting for businesses, it also demands a serious level of strategic thinking to expand in a way that has minimal risk and maximum reward.

Globalization has been driven by many different factors, including:

  • Advances in technology and transportation
  • The falling costs of international travel and communication
  • The declining significance of national sovereignty
  • The increase in the volume of ethnolinguistic minority groups migrating to other countries

The Internet, apps and technology like 4th and 5th Generation AI, machine learning and NLP enable small businesses to compete on the global stage.

Once confined to one geographic area now all businesses and organizations have a larger role in the global economy, thanks to trade agreements and globalization. However, larger markets don’t just mean more customers.

Here are many challenges to ‘going global’, especially for startups and small business trading.

In this business blog article, we focus on how exactly globalization impacts small businesses around the world, including:

  • Access to new markets
  • Staff
  • Competitivenes

1. Access to The Global Market

Small businesses benefit from lower trade barriers, which allows them to reach customers in other parts of the world who were previously out of reach. Selling products to customers in other countries can help a small business grow, especially if it offers something those countries want.

Because of advances in technology, communication between countries is more accessible than it’s ever been. You can now conduct customer service, marketing, and sales operations in other countries without a physical presence. This, in turn, can significantly reduce the costs associated with operating internationally.

Now, every consumer can reach into their pocket, pull out their smartphone, and access the products or services you and other small businesses are selling. This can massively increase the revenue of any small business beyond what it could produce before globalisation took effect. To fully understand the cost of your products so you can ensure the customer gets the best price from you and your business makes a profit – use this product costing template.

2. Supply chains are global

When products are made or assembled by a local manufacturer, they are often transported over national borders. Phones, clothing, and even food are manufactured in other countries. The rise of globalization has made it easier for these business relationships to cross national borders. In addition, technological advances have made cross-border supply chains easier to manage, especially when the supplier is located in a different country.

3. Remote Staffing

Another impact that globalization has had is the availability of remote staff aka remote workers.

Not long ago, startups and small businesses needed a workplace for staff. Now, enterprises hire staff and freelancers anywhere in the world. Technology can help you find skilled people in other parts of the world, which could be challenging to find locally. This is true for various skill sets, including engineers, designers, content creators, and salespeople. Finding the right people for your business can be easier and cheaper if you cast a wide net outside your country.


Continuing with the influence of technology, consider how life-changing Industry 4.0 tech is with its cloud computing, AI, automation and collaboration tools.

Security is a priority for businesses that have remote workers. Accessing business systems remotes is a vulnerability that cybercriminals are aware of and look to breach, but there are security measures companies can take to prevent cyberattacks.

Another option with globalization is to outsource more business tasks like marketing and the back office. It is not uncommon for companies to use digital marketing services or website developers located offshore rather than hire locally. The cost savings empower startups and small businesses to compete with the big enterprises.

4. Competition from Around the World

Next up on the list, we have competition. As globalization increases, more and more businesses enter the market. Thanks to that accessibility we mentioned earlier, there’s a ton more competition for small businesses around the world.

There will likely be ten other businesses selling similar products for the product you are trying to sell. That means that companies now need to improve the quality of their products and lower prices enough to stay competitive. Or else they risk getting kicked out of the market thanks to this high global competition. So, check out the foreign exchange headlines and other financial news outlets to keep ahead of this competition.

5. A Business Equalizer

Thanks to globalization, everything has become a bit more equal.

The Internet gives every single business access to marketing tools, business information, and everything else that can make them as competitive as larger and more established companies.

That’s part of why Uber and other tech giants rose in popularity so fast. The business world is a lot more equal now, letting small businesses gain popularity where they wouldn’t have been able to before.

Summing Up

Understanding how globalization affects startups and small businesses worldwide is an opportunity.

Small businesses stand to benefit from the effects of globalization in many ways. One advantage is the ability to reach new markets. A small business can grow by selling products and services to customers in other parts of the world, especially if it offers something that those countries want.

Small businesses can also benefit from technological advances that make operating internationally easier and cheaper. The internet, in particular, has made it easier to find the right people for the job, whether in your own country or another part of the world. Lastly, small businesses can network with other businesses and people in their industry or join online communities where they can learn from others.

While there are threats, you can work out what they are and plan to mitigate the risks. See our recent article on Globalization 5.0.

Thanks for reading this article.  You might also enjoy our latest update on business economic performance.