Modern global capitalism has improved the lives of billions of people. Over the past 50 years, new advances in communication technologies and transportation have revolutionized modern business practices. The following guide provides some examples of benefits and challenges that arise with a global marketplace.
Through the combined effort of different countries, it’s possible to produce products for an incredibly low price. Since a company can specialize in a single component for a product, it can develop cost-saving industrial technologies that can lower the overall cost of a device. For example, almost all zippers in the world are manufactured by a single company, YKK. It’s possible to see the YKK logo on jeans, luggage, jackets, backpacks and more. Since YKK has developed specialized machinery that can produce zippers for a low price, it has been able to dominate this industry. This provides a benefit for YKK and its clients. Clients that need bulk zippers can purchase a discounted item, and YKK can increase its sales.
However, globalization has several significant disadvantages for local economies. In many cases, jobs will move offshore to places with cheaper labor and a low cost of living. Over the past decade, many American manufacturing jobs have moved to places like China, India and Pakistan. While the United States still has some good blue-collar jobs, many people who work in manual labor are experiencing employment problems.
In addition, it can be challenging to control the quality of products that are manufactured in foreign countries. For example, there have been hundreds of incidents where contaminated goods have entered the American marketplace. Three years ago, there was a scandal surrounding toys for children that contained lead. A recent scandal involved pet food that was contaminated with a non-protein ingredient. This incident resulted in the death of thousands of pets.
While globalization has some downsides, it is a powerful tool in driving the modern economy. As container ships grow in size, the cost of shipping goods across the globe will decrease. In addition, many white collar jobs are being outsourced to areas with lower labor costs. This can be a great way to provide services for a reasonable price.