The global economy is undergoing major changes that are commonly referred to as globalization. This is characterized by closer economic integration and interdependence through the growth in international trade and investment. Lower barriers to trade have contributed to this process, but there are many other factors at work. Technological developments in the computer, communications and other industries; decreased costs of transportation; increased access to information worldwide; and other economic forces are contributing to globalization. Foreign direct investment has increased dramatically. Production by foreign affiliates of multinational companies now exceeds the trade of goods and services. Many firms now operate in a global marketplace.

The process of globalization does not, however, come without cost. Nor is it accepted as inevitable by some. The most widespread concern is the impact on employment, particularly when capital can move freely across borders to locations where it obtains the greatest rate of return. Workers in industrial countries see low-wage competition from developing countries as a threat to their jobs and standard of living. There are differing views on whether globalization helps to increase well-being in developing countries by stimulating economic growth and employment, or by locking workers into low-wage jobs with little future.