International Production and Governance - Essay Example

Introduction Industrial production and governance are the two major concepts that define a country’s growth and development. The economic policy of countries like Unites States and China maintain unique strategies that helped them to carve a niche for themselves in the global market. The global market is composed of industries from leading countries and this encompasses the demand for the various products. Globalization has helped these countries to grow at a faster pace and it has benefited almost all the industries. This paper describes the economic growth, political aspects and effects of globalization on the international market. The impact of recession on the global market and effect of economic crisis are also described. Global imbalance occurs only when the country’s economy goes through a terrific downfall or there is a sudden change in the political system. The government is then reorganized to pacify the existing problems and to improve the situation so that the country can revive to its normal form. U.S Economic Policy United States is considered as the super power due to its economic and political stability. The economic stability helps the country to overcome any sort of downturn and economic downfall. As most of the countries today depend on United States, the commitment to maintain a stable economy is considerably more when compared to other countries. The economic crisis and recession hit United States so hard that the country struggled to get back to a stable state. The political changes also had a great impact on the country’s economy. US economy is more vulnerable to economic downturns since the country relies on several other countries. When compared to all the other problems, the 9/11 attack was considered to be the most deteriorating problem in the United States. Though the country had a reliable government and political parties, it was difficult for the country to recuperate to the normal situation. (Wade, 2009). The country’s economy went through a bad patch and the government officials implemented various strategies to bring back the country’s economy to a stable form. Political Hegemony The political hegemony was vulnerable right from the days of the Cold war. From then America has been one of the very few countries which had the ability to fight with any continent. This created a sense of fear among the other countries. Though the country’s government was filled with political leaders from several parties, the development in terms of politics was unbeatable. The political administration before the 9/1 attack was considered to be best strategies since the country established a cordial relationship with almost all the countries in the world. Due to this factor, America was the most sought after nation in the world. The economic and political stability contributed to the country’s success in each and every field. The political hegemony and the dictatorship continued even after the Cold War. Generally a country which is economically strong tries to dominate over the other dependent countries. Since US had the capacity to control the countries which relied on it; the government took an upper hand in controlling the other countries. Due to this factor, the political hegemony started to invade America. The political hegemony was clearly visible from the political reforms that came into existence after the Second World War. The role of US in the global economy went through a drastic change by the election of Obama. Till then, U.S was the country on which most of the other countries depended. International organizations and multinational corporations are the highest rated corporate in the world. A country can easily operate with the company that is in America or London. The advancement in the information technology has led to a situation where countries like America rely on other countries to accomplish their business activities. Bill Clinton and George.W.Bush were the major reason for the America’s interaction and commitment with other countries. Most of the American companies continued their operation with the help of people from other countries. Once Obama came into the government, the operations went through a complete change. (Watson, 2010). This was due to the fact that most of the governmental policies were revived and modified. Obama imposed certain regulations and laws that restricted the outsourcing facilities. Due to this factor, the economy of almost all the countries experienced a sever downfall. This clearly proves that the global economy was largely affected by the election of Obama. The economic crisis and recession also left the global economy in a pathetic situation. The recession and the economic crisis left many people jobless which in turn affected the country’s economy. Distribution of Profits Distribution of profits is a great concept which purely relies on the global production chain. Innovation is generally more in electronic and communicational operations and products. The reason is the unimaginable development and advancement due to the innovative options. The distribution of profits from innovation is not stable since the market conditions can change whenever there is a development or modification in the existing method. The innovative methods and strategies create a great impact on the industries that rely on product that entirely depend on innovation. When considering an industry that completely relies on innovative products, profit is more than a normal word. Since the supporting industries have a constant contact with these manufacturing industries, the task of distributing the profits is not a major issue. Value Capture IPods and notebook PCs are the products that contribute to the major portion of the profits in the global value chain. The products based on computers and communication medium are the most sought after products and their sales generally out beat the sales and distribution of other related products. IPods are one of the most innovative and creative products that rule the market irrespective of the manufacturing company. As it is considered to be an innovative product, the distribution and marketing becomes an easier task. (Wade, 2009). Notebook PCs are also popular among the tech savvy as it replaced the concept of laptop. Though both are more popular and earn more profits to the organization which manufactures it, there is a difference in the value captured between the IPods and notebook PCs. The value capture is generally a two step process which includes the surplus funds to the producer and the subdivision of the profit among the partners. Due to the difference in the price range of the products, the chances of getting a difference in the value capture. The product’s manufacturing cost and marketing cost decide the product’s entire cost structure. The operating profit and the margin of the price decide the value capture of the product. The developing countries generally rely on the value chain as it helps them to gain more profit. The global chain depends on the operation of every process and delay of even a single process will lead to severe consequences. The lower part of the value chain is the most concentrated part since it controls the other aspects that rely on it. The developing countries depend on the global value chain of a product and concentrating on the lower part of the value chain will not fetch much profit. This in turn will affect the country’s economy which may cause other serious issues. Globalization Globalization is considered to be the most popular concept that helped in the growth and development of the economic status of a country. The aspects of globalization have helped most of the countries to gain an advantage in the terms of country’s economic and political status. The benefits of globalization can be experienced only when the country operates on another economically stronger country. The import and export, exchange of labor and foreign investment have been made possible only with the intervention of globalization. The corporations use time arbitrage to achieve these benefits of globalization. A global market is a place where the companies make use of various strategies to gain more profit in a shorter period of time. To achieve the maximum profit, corporations make use of time arbitrage so that they can also gain the full benefits of globalization. (Pyle, 2003). In case of time arbitrage the number of hours spent in the production of a particular product. The corporations make use of this time arbitrage to make their presence felt in the global market. The buyers and sellers involved in the transaction process are also considered when using time arbitrage as a factor to experience the benefits of globalization. Globalization is not a single concept; instead it relies on modernization and liberalization of the government. With the implementation of globalization, the countries involved in product manufacturing, export and import achieve greater financial benefits. Outsourcing and off shoring Globalization certainly benefits the employers involved in the outsourcing industries. The time arbitrage is used only when the positive aspects of globalization is not felt. In this case, the corporations make use of time arbitrage to gain advantage over the other competing companies. This proves to be beneficial for the employer as the globalization helps them to improve their business at a faster rate. Recession has created an impact on the economy of almost all the countries. Due to this reason, most of the countries have cut down on their rate of outsourcing and off shoring. The firms involved in outsourcing and off shoring often have a second thought on pursuing these operations since recession has hit them hard. The competition has increased when compared to the past and the situation after recession is completely different. Though outsourcing helps the receiver countries to gain more jobs and to have a knowledge transfer, the process of outsourcing is a tedious one. Outsourcing is mainly done to cut down the costs incurred and to implement the process at a faster rate. (Watson, 2010). The employees involved in these sectors will have an opportunity to acquire new technologies. The scarcity of resources generally leads to outsourcing. The rate of outsourcing has been considerably reduced after recession as the companies hesitate to establish a contact with a new company. The challenges and problems are more when compared to the period before recession. Aerospace Industries Aerospace industries are most prominently found in European and American countries. These countries are considered as the giants in the field of aerospace and other high-tech industries. This situation has gone through a change and countries like Brazil, Indonesia and South Africa have entered the aerospace market. The aerospace industry is certainly a challenge to these developing countries as the other countries involved in this industry are economically stronger. The political and economic stability and factors of a country determine the success of industrialization. The financial aspect is an important factor since the aerospace industry requires a storing financial background to maintain and upgrade the technology according to the standards of the industry. The Brazilian aircraft companies manufactured small jet planes that were used for small operative purposes. The companies in Brazil adopted certain strategies to ensure that they establish a stronger base in the aerospace industry. Since the domestic market is accommodative, the aerospace industry had a great chance to establish distribution channels. The cost also was independent of the market size and this proved out to be a successful strategy. The aerospace industry maintained the difference among the various products and this enabled the industry to have an advantage over the other countries. In contrast to Brazil, Indonesia opted to use the existing technologies to manufacture an aircraft. Instead of using the new technologies, the incorporation of existing technologies helped them to build a better aircraft. Another strategy followed by the Indonesian aircraft industry was to invest their income in new technologies so that the aircrafts will have a better performance. They also established manufacturers who were technically strong. This was done to ensure that the aircrafts were built with a technical view so that technical problems can be avoided in the future. Role of State When considering a country’s economy, the states in the country play a major role. The economic status of each and every state also matters when ascertaining the economic status of a country. Economic management is necessary as the country can suffer an unexpected downturn. This may occur at any point of time and it requires proper management to make sure that the country is free from economic issues. In the recent times, the role of the state as an economic manager is declining. (Pyle, 2003).The reason for such decline is the inability to manage the financial aspects of the country. The governmental decisions must be made only after considering the heads of the state. Mere decision making without the consent of the state will result in problems. The decline in the role of the state is due to the haphazard decision making that often results in severe consequences. Gendered Effects Globalization, though treated as an advantageous concept, has led certain drawbacks like gendered effects of globalization on trade, production and finance. The biased system is still followed in most of the industries. This in turn results in problems related to gender and the issues that they encounter in the workplace. The division and difference among the gender arises when the labors are selected for a particular industry. The gender inequalities have been prevalent and the researchers and authors have been in the process of imposing certain strategies that would reduce this problem. Globalization was more successful due to its benefits that assisted the country to develop at a rapid speed. This ensured that the country’s import, export and other financial transactions were made in a hassle free manner. Though globalization has certain advantages, certain aspects lead to a situation where it creates gender difference. Any improvement or development is generally accompanied by minor issues. These issues result in gender bias in almost all the industries. In most of the industries women are not given equal importance and they are treated in a different manner. This problem continues even in the process of wages. The industries that entirely depend on both men and women laborers tend to segregate the wages based on the gender. In production industries, the demands for male workers are more when compared to female workers. Due to this factor, the women are sidelined and they are not given any opportunity in the production industry. The problem continues in the financial sector too. Though financial sector has equal demand for male and female workers, the gender difference prevails. The global production networks include export production, domestic service, work related to sex and income generation through microfinance. These are considered to be the networks that women are generally involved in. In advanced market economies, gendered effects of recession generally exist. Most of the countries incorporate strategies or framework to manage their economy. In these modern days, the market conditions and economies are more advanced to cope up with the changing market conditions. This is done to ensure that the country is well equipped to handle any sort of problem. Conclusion The economic policies and political ideologies play a vital role in a country’s development. The political aspects and the governmental regulations decide the country’s financial status. A government must have the ability to manage the country’s economic status. They must incorporate strategies to improve the financial status and to make sure that the country maintains a stable position in the market. Reference Wade, Robert. “From Global Imbalances to Global Reorganizations” Cambridge Journal of Economics 33.4 (2009): 703-724. Watson, Allan. “US Hegemony and Obama Administration: Towards a New World Order? Antipode 42.2 (2010):242-247. Pyle, Jean. “Recasting Our Understanding of Gender and Work During the Global Restructuring” International Sociology 18 (2003). Read More