I believe that globalization promotes development by spreading technology and knowledge to all over the world. It positively enhances the world economy. I’d like to shed light on two aspects. One is for the economy in developing countries and the other is for the economy in developed countries.
First, investment/overseas operations contribute to generate job opportunity for people in host countries. I believe that launching a business in host countries or investment would be effective to increase their incomes. Besides, workers are taught skills and exposed to new technology. As a result, national strength of host countries would be enhanced. I believe that a strong industrial economy has been proved to be the best way to lift people out of poverty. This is significantly beneficial to developing countries. Let’s take semiconductor factory for example. Sony builds one semiconductor assembly factory in Thai land. It is said that establishment of this factory increased employment and boosted Thai land’s economy.
Second, the world economy has been encouraged by franchise system. I believe that one of the symbolic ideas of globalization is franchise system such as Macdonald, Seven-Eleven. Especially this business model has been penetrated in developed countries. We can find franchise chain shops at every corner across the nation. For example, Sushi, bowl of rice topped with beef, Chinese noodle franchise chain are typical in
In conclusion, globalization is beneficial to both economy in developing countries and developed countries.
1 comment:
Why Outsource to China?
Globalization and Technological change cannot be separated. Because global integration is driven by advancement of telecommunications and transportation. Nowadays globalization in business is becomming standard. If you buy a car, now you have difficulty to find where its true nationality is, because so many parts are coming from various countries, and the car maker turns out to be a global company.
In business, crucial part is balance of production cost and revenue, so even in case of Japan, since more than 20 years ago, a lot of Japanese business people had gone to China in seek of cheaper production chances. But they had no luck, what they found there were only unsophisticated production practices and lame technique. For example at that time Chinese craft men could not make steel pipe which had even thickness. So, even though labor was very low, nobody wanted to outsource to China. But now so many foreign companies have been shifting their factories to China. Why is this happening? It's because not only they can do it cheaper but also now they can satisfy the requirment for quality. Surely wages are lower in China and India and various places in developing world, but it's not all about wages. Wages are only part of equation. It's also about skills, and about productivity and about infrastructure surrounding people there.
Consequences? We have been developing great deal of fear about good jobs going to developing nations particularly China. So many of manufacturing jobs are going to China or India, and if they are high technology jobs, we are going to be without jobs! How can we go on?
How to survive? To sell a product, what is required is value added to it, and that value has to do with skills and productivity, not low wages. For example, European countries have advantages in the field of design. Even if the product is manufactured in Bangladish, customers in industrialized countries still love it being designed by a French designer. So you need to consider where you are on the globe in terms of capacity. Your capacity to add value through skills to this globally integrated system is directly related to your standard of living, and will be in the future to a greater and greater extent.
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