The relationship between production and space and time is becoming ever more important in the global economy. As more industries move farther away from fordist mass production towards post-fordist flexible productions, companies have to consider many different aspects when considering a geographic location for production facilities. With fordist style mass production it is economical for companies to look at subcontractors and production facilities to be located in areas that can offer the lowest production costs. With this style in the 20th century companies generally produced the products in the global south because labour is so cheap. This form of globalization relies on the new international division of labour in which multinational corporations (MNC) locate themselves in less costly production sites. In recent history companies have moved towards using a more flexible production style. With flexible production, companies often adopt a just-in-time approach to production which requires their subcontractors and production facilities to be much closer in proximity to each other and to the consumer. They do this because industries are growing at a rapid pace and are very fickle with demand. It does not make sense for such industries to produce mass quantities of products. MNCs using this approach do not produce their product until it is ordered. This forces subcontractors and suppliers to be very responsive with products and therefore they need to be close in proximity. This approach often increases the quality of products as well because they are sent in smaller orders and therefore cannot afford them to be dysfunctional. Lastly, this method allows companies to save money on their overhead by not stock piling mass quantities of goods. There are various reasons as to why a company would choose a particular geographical location on top of their production method. The main purpose is that MNC need to balance the responsiveness of their production sites with proper geographical spacing. The case of Cork Ireland is a good example of why companies move to a location which does not offer the cheapest available labour. In 1947 the Shannon Free Trade Zone (FTZ) was established. This was the first established FTZ in the world and it gave MNC the opportunity to move to a tax-free location with an abundant workforce at competitive prices. This is an example of a ‘greenfield’ site outside of the global south in which MNC could move to be competitive within the European economic market. Companies that moved here were interested in competing in volatile, rapidly growing markets such as the computer technology and production industry. Cork was an excellent geographical choice for many reasons. Initially the Irish government would pay 60% of a company’s start-up costs, as well as allow 100% of the company’s profits to be repatriated. Computer production companies also received benefits through regional trade agreements and a reduction of tariffs. Lastly when a MNC moved to Cork it offered certain characteristics of its labour workforce which allowed it to construct a workforce suited for them: it offered competitive wages, a well educated workforce, high unemployment, and also a mostly young, green and female labour force. An example of an atypical ‘greenfield’ could be Brooklyn, New York, as seen in the movie “Made in Brooklyn.” This movie shows that there is still an immigrant labour force available for the manufacturing sector of Brooklyn, even though it is an area dominated by service jobs. It shows that there will always be a niche for a production industry; even if it is a developed city, and even if they are simply producing lamps.
interconnected nature of the global economy requires business to think about resource use on a global scale, as opposed to an individual activity.
The main sub-sections of the report discussed include:
The link between human overconsumption and negative environmental effects;
The impact of depleted of natural resources stocks on business production;
How green production of goods and services and sustainable business practices creates business opportunities; and
The global economy.
AUSTRALIA AND THE GLOBAL ECONOMY
Globalization: the expansion of business operations into other countries through the removal of economic barriers and increases in global technology
Global economy: The production, distribution and consumption of goods and services on an international level
Reasons for globalization
* Rapid advances in technology (e.g. internet)
The internet makes the exchange of information between countries much easier as well as provides…
(Fortunecity, 2011) For example, as china was engaged in its economy growth, its rapid development was based on heavy industry expansion. And this required huge contribution of energy such as coal. (Nytimes, 2007) In addition, too rapid growth will result in high inflation. Take china as an example, its fast growth not only increased the country’s economic but also bought about obstinately high inflation. And this intimidated to economy overheat and challenged china’s long-term prosperous. To be…
in global economy
According to Europa (nd), the European Union (EU) is a politico-economic union of 28 member states which is headquartered in Brussels, Belgium. The EU was emanated from the aftermath of the Second World War. Its original organisation is the European Economic Community (EEC) that was initially aimed to boost economic cooperation and avoid repeated wars which destroy economy to a large extent. This paper mainly focus on the significant position of the EU in the global economy and…
POLITICS FOR THE GLOBAL ECONOMY FINAL PAPER
Ecuador experienced many economic and political difficulties during the 1990’s. These different economic displacements, as Kindleberger will name them, lead the Ecuadorian government, into finally declaring the U.S. dollar as the official national currency early in 2000. This policy was implemented as a “policy of last resort” since it was the last resource that could possible provide a path out of economic recession and help avoid the disastrous effects…
Gender And (Sex) Work In The Global Economy
In Global Woman: Nannies, Maids, And Sex Workers In The New Economy, Ehrenreich and Hochschild present the idea globalization of women’s traditional role poses important challenges to anyone concerned about gender and economic inequity. There overall argument is that women are migrating to other countries seeking work benefiting themselves and their family. Women’s drive to escape poverty often placing them…
Appadurai states that the new global cultural economy is too complex to be understood by simpler models such as center-periphery or surplus-deficit models. A brief analysis of the complexity of its different aspects as Appadurai observed will make this clear. In order to back this argument up, I will first detail the difference between cultural heterogenization and homogenization, and how that shows current models are not fitting to describe the new global economy. Secondly, I will then verify Appadurai’s…
Agreements Act) – gave the president the ability to negotiate foreign trade agreements for three years without approval from Congress for changes up to fifty cents (Ravenhill, pgs. 14 & 118).
4. Seigniorage – is the provider of the currency in an economy which has benefits of increased political and economic autonomy, increased income, but also has to pay other countries for “holding assets in their currency” (Gilpin, pg. 120). For a long time the United States has been the able to enjoy many benefits…
Assessment Task 1 – Global Economy Research Essay
Explain how globalisation has led to variations in the standard of living and contrasts in the level of development between nations that make up the global economy.
In your answer you will need to make a specific reference to the role played by trading groups, agreements or blocs.
Globalization refers to the increased integration of economies on a global scale. This can be categorized by the increase in investment, trade and communication…