Question 2: Globalization can be very threatening for the small firms. How can governments and other supranational authorities support these firms?
Business environment is always changing, as President Obama emphasized during his elections, ‘Change’ is needed and the reason why we need to change is because everything is changing rapidly after the boom of internet and the only result to those who is not able to catch up will be one simple word, ‘Elimination’.
What is globalization and what are the impacts of it to the global economy?
Globalization describes a process, not a state. As Dalton.G. 1. points out, it is hard to describe these series of process so I will take New York Times ...view middle of the document...
It is used as a reason for imposing tariffs on imported goods so as to support the local industry’ 2.
‘Infant Industries’ always refer to the less developed countries (LDCs) which most of those are also called as Small to Medium Enterprise (SMEs) which are the foundations of the economy in the countries. There are no limitations in what kind of industries that you are working in but focusing on the size of the company only. In HKSAR, by the Business Registration Ordinance (Chapter 310), our definition in SME is ‘a manufacturing business which employs fewer than 100 persons in Hong Kong; or a non-manufacturing business which employs fewer than 50 persons in Hong Kong’ 3.
There are so many benefits and damages to the infant industries under the globalization and so we are trying to figure out as much as we could in order to see anything our government or supranational organization could support these firms.
POS and CONS of globalization towards the infant industries
Everything has the bright and the dark side so does the globalization. There is different kind of critics on this issue, here are some of the ideas:
POS found in the infant industries of the Asia’s developing countries
• A change of capital policy facilitated the investment from the foreign investors that they are easier and confident to setup a foundation in order to catch the benefit of the booming market and brings business to the local small companies.
• Supported by the economic policies and the import of advanced technology, small businesses in these countries are able to meet the standards of the developed countries and this greatly improved the growth rate of the employment. For instance, the economic growth rate of India has been over 8% per year.
• Under the law of Supply & demand in the Economics, an increase in supply will decrease the price of the products when the demand remains constant. During the globalization, consumers will be able to get cheaper products or a better products, this is also helping the country to control the inflation rate and let the country to have a more stable economy.
• According to the World Bank Development Indicators research in the 2008, the poverty rate of our world population had been decreasing in the last 30 years which is matching the period that the globalization started in our business world and this is the direct help by the SMEs.
• Foreign investor, MNC (multinational companies) brought theirs products as well as the advanced technology, the modern R&D helps cutting down the production cost and the market analysis knowledge also brings up the sales. Other than the profit making scenario, this also upgraded level of the local labour force in order to develop this own brands.
POS found in infant industries of the America’s and Europe’s developed countries
• Outsourcing is one of the most significant benefits to the corporate, the best part of this is ‘get the work done in lesser cost’, At the same time,...