Table Of Contents
Table of Contents 3
Executive Summary 4
Sources of Globalisation 5
Off shoring of Australian jobs 6
Income equality 6
Foreign Direct Investment 7
Local Investment in the Global Economy 7
Stability of the Australian Economy 8
Reference List 9
The world’s economy is changing at an ever increasing rate. The rise of global markets and multinational enterprises which have developed over the course of a few short decades are a part of the phenomenon termed globalisation. With the numbers of the worlds ‘middle class’ particularly in the developing world growing at an exponential rate, falling trade and ...view middle of the document...
The report will find that globalisation is dramatically changing the landscape of the Australian economy by placing it in forefront of the changing world.
Sources of Globalisation
Globalisation is described as “The shift towards a more integrated and interdependent world economy.” (Wilson, 2009) and while the increase in world trade is one of the factors which characterise globalisation it is not alone. Globalisation can be characterised by two broad categories: The globalisation of markets and the globalisation of production (Wilson, 2009). An example of the globalisation of markets is the concept that no longer does a manufacturer look to develop, market and sell a product within the company’s country of origin but can sell that same product within several or even dozens of countries within the world. Likewise the concept of globalisation of production explains that companies no longer consider themselves constrained to manufacture in their country of origin but see the world as their production facility and can manufacture a product in the location which is most cost effective or can produce the highest quality.
There are two key drivers which bring about the advance of globalisation which are: Declining Trade and Investment Barriers and the Development of Technology (O'Neill, Basu, & Travaglione, 2007). Australia, even given its isolated geographic location and small population, is not immune to the effects of globalisation and is seen as key player in the new global community (O’Neill, et.al. 2007). Australia’s plentiful natural resources and location in the Asia Pacific region have contributed and benefited from the rapid development of third world countries into modern societies. Some of the major effects that globalisation has had on the economy of Australia are discussed in the following sections.
Off shoring of Australian jobs
When the large majority of the population think of globalisation one of the foremost thoughts relates to the loss of jobs offshore (Garrett, Evans & Williams, 2006). As discussed earlier one of the key characteristics of the globalisation movement is the view of companies that no longer are the constrained by borders with regards to their production facilities but the whole world is an option. A company may choose to move its operations overseas for many different reasons including; lower cost of labour, higher technical specifications, to move closer to a market place or for organisational reasons including lower tax rates.
Over the last couple of years Australia has seen several high profile factory closures resulting from companies moving their production facilities to an off shore location (Darby, 2007), (Fenner, 2009). While the move of these facilities may have been made to reduce the companies labour costs, significant social backlash has been seen against these companies such as the case where after the Australian boot maker Blundstone moved its production facilities to Asia a boycott...