What is globalisation?
Advances in technology, combined with the liberalisation of national economies, have brought globalisation to the world economy. Internationalisation of trade carries many benefits such as the free movement of capital, but has also generated concern over the social and environmental consequences.
Debate is split between those who believe that progress and the eradication of poverty are best achieved by allowing global markets to emerge, and others who argue that capitalism is unlikely to address human and environmental concerns adequately. The key issue is whether the free market sufficiently encourages companies to take such concerns into account, and to what extent new standards and corresponding new accounting tools are needed.
Inter-governmental support for the idea of sustainable development, which gives equal weight to economic progress, environmental protection and social responsibility, has intensified the debate.
What are the effects of globalisation?
- A dramatic increase in the amount of trade between nations.
- Products of large companies are available in virtually every market in the world.
- Companies often locate their factories and offices in the place where the skills and raw materials that they need are cheapest.
- Many big businesses get bigger and bigger.
- Companies with links to many areas of the world are less likely to suffer recession.
What are the benefits of private enterprise?
In principle, private enterprise is beneficial and works best when there is competition in markets. Competition provides strong incentives to innovate and adopt best practice, which leads to higher living standards.
History shows that prosperity also brings demands for higher social and environmental standards.
Due to the capital investment nature of our operations, Shell companies are long-term investors.
