Global Business Environment Strategy

The interrelation of globalization, production, and development.

Daoud Al Hout

Global Business Environment Strategy

Charisma University

Dr. Pol Lim, Francis

28. of August 2022

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Abstract

Economic globalization involves trade, capital flows and therefore the

movement of labor, and a vital component in that method is that the globalization

of production. With the gradual dismantlement of trade barriers, and capital flows

turning into easier, globalization of production has flourished. it is not necessary to

provide product in one location. even though a product could bear the mark of

being created in a very specific country, its parts could return from totally different

locations. significantly for high-tech product, research and development (R&D) is

sometimes disbursed in developed countries, parts are created in several countries

counting on their competencies, and therefore the final assembly takes place in

another country. This approach is additionally used for effortful product like

clothes, mobile, etc. globalization of production has influenced the globe of labor

in ways that not seen before. whereas some impacts are positive from the purpose

of view of employees, others have given rise to serious considerations. On the

positive aspect, new employment opportunities as yet unknown in several

developing countries have opened. On the opposite hand, serious pressure on the

socio-economic class has return through the stagnation of real wages and adverse

work conditions. The term ‘race to the bottom’ has acquire circulation during this

context. however, this does not have to be compelled to be the only approach
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forward, since there are helpful positive aspects from that staff may benefit aboard

the rest of the worldwide community. This paper explores the relation of

globalization, production, and development and can mentioned a real-life example

of apple company and the way the globalization helped the corporate to be a global

company with a well know brand that effected positively on its profit.

Keyword: Cooperation, globalization, inequality, migration, transfer pricing

Argument

The relationship between globalization and development is contested. For

some, globalization could be a powerful force for economic condition reduction

and has crystal rectifier to leaps in life expectancy and alternative key dimensions

of development. For others, globalization has negative implications and is seen as a

supply of growing difference, poverty, state, and environmental destruction.

‘Globalization and development’ contemplate the necessary aspects of

globalization that have a control on development: international economy flows and

differing types of monetary investment; the promotion of just trade for developing

countries; technological progress; international regulation and cooperation to stop

transfer rating and tax avoidance; and the impact of international migration and

therefore the rise of refugees due to war and race murder. In this paper we will
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discuss the adopting new technology by globalization and how it effects

internationally

Theoretical Framework

Globalization is interpreted in many ways and may be understood as an

increase in the impact of human activities that span national borders. Globalization

is a process associated with the integration of societies and may be measured in

terms of flows across national borders. These flows may be economic, cultural,

political, social, technological, environmental, human (travel and migration),

biological (diseases), or virtual (cyber, telecommunications, and Internet). The

principal economic flows are finance, trade, aid, migration, and intellectual

property and ideas.

The relationship between globalization and development is contested. For

some, globalization is a powerful force for poverty reduction and has led to leaps

in life expectancy and other key dimensions of development. For others,

globalization has negative implications and is seen as a source of growing

inequality, poverty, unemployment, and environmental destruction. Advocates of

both perspectives can point to evidence to support their views as in practice the

flows that represent globalization can have both positive and negative impacts. The
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outcome depends on the policies and preparedness of societies to manage the flows

to ensure that the positive potential is harvested while the negative consequences

are managed and mitigated.

The relationship between development and technological progress is

complex. Technological progress embodies new ideas and is bundled with an

often-wide range of skill, process, infrastructure, cultural, and other changes.

Separating the specific role of technology as a driver of development at times may

therefore exaggerate its role. The wheel, gunpowder, printing, the steam engine,

the telegraph, penicillin, and the Internet have all had a profound impact on

development. Yet, their implications are highly uneven. No technology is a

panacea and the adoption, adaptation, and dissemination of technological changes

need to be seen within wider institutional, economic, and social settings.

Technology has come to be associated with ‘hardware’—such as computers,

machines, and equipment—but it is also ‘software’, including the systems,

methods, and processes which are used to achieve particular scientific and other

goals, or are associated with the production of goods and services.

The adoption of new technologies is a key dimension of development. So

too is the adaptation and modification of technologies to meet local needs and be
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applicable for use within particular societies. Skills, attitudes, and infrastructure

have a strong influence on this diffusion between and within countries. As does the

regulatory and policy environment, both at the international and national level.

Trade in goods and services and flows of capital are often packaged with ideas and

innovation and there is an extensive literature on the role of technology transfer in

foreign investment.

The allowance of intellectual property protection to traditional information,

and culture would permit developing countries to benefit from their own native

knowledge and improve the commercial value of poor individuals’ knowledge. The

use of plants and medicines from developing countries in modern medicines, or of

craft projects from traditional communities in Africa or Latin America, is rarely, if

ever, rewarded with the expense of a royalty, as would apply to designers and

artists in richer countries.

The use of information and communications technology for development,

labelled by the experts as ‘ICT4D’, can significantly improve opportunities and

allow societies to leapfrog the absence of fixed-line infrastructure to ensure high

rates of penetration in both urban and rural communities. In Kenya M-PESA has

provided financial services to previously neglected poor communities, as well as to

the urban middle-class using mobile phones, dramatically increasing access while
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cutting the costs of financial transfers and other services. Elsewhere, ICT is being

used to communicate market prices, improve health and education, and to offer a

widening range of e-services. To ensure that ICT serves to assist development it is

necessary to overcome the ‘digital divide’. A key element of this is the provision of

high-speed broadband coverage to often remote poor communities.

The term ‘intermediate technology’ was articulated by E. F. Schumacher in

his book Small is Beautiful and has been transferred into a development context by

those who argue for the need for ‘appropriate technology’ which is designed to

meet local needs, avoiding capital and energy intensive imports which cannot be

operated with local skills or energy sources, which should preferably be renewable

The world has witnessed the fast pace of scientific invention, with advances

in computing, Nano medication, stem cell analysis, genetics, artificial intelligence,

robotics, and computing all inform to the potential for science to handle essential

challenges. Optimists purpose to the potential of those and lots of different

technologies to satisfy the requirements of development. Others worry regarding

the potential for the fast pace of modification to depart several poor countries and

poor individuals any and any behind. One trend that has the potential to widen

difference is that the enlargement of technology that replaces individuals with

robots and machine intelligence. though automation itself is not new, several recent
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and promising innovations during this field—such because the enlargement of the

internet and artificial intelligence—are possible to revolutionize producing and

services any within the future. A recent study from the Oxford Martin faculty, cited

within the World Development Report 2016, indicates that around one-third of

jobs within the Europe, half jobs within the USA, and up to simple fraction of jobs

in developing countries like China and North American country may well be lost

within the returning decades because of automation. One argument is that

automation is simply profitable in sophisticated industries that square measure

focused within the advanced and middle-income economies. It follows that poor

countries will industrialize by cultivating industries wherever labor is relatively

low cost like textiles, vesture and animal skin. Over time, however, automation

may become more and more possible in light-weight business still because the

service sector (through the creation of decision centers and back offices).

Automation may have an effect on international patterns of demand which can

have adverse consequences for poorer economies. New jobs are going to be created

too however these are possible to be dwarfed by the amount of jobs lost. several of

those new jobs also are possible to be of inferior quality and to involve lower pay

and worse operating conditions and career opportunities.

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Automation is best in rules based mostly comparatively easy tasks that don't

need great quickness or muscle. it is impacting initial on repetitive producing tasks

and is also being applied to body, request and back-office functions, like are

current in law, finance, insurance and drugs. decision centers are extremely

vulnerable. In recent decades, the situation of those semi-skilled producing and

services jobs in developing countries has provided very important middle rungs for

the event ladder. This model of development now's vulnerable by robotics and

automation. wherever machines and computing do tasks, it's the value of capital,

not labor, that's likely to see production location. This as well as growing economic

policy and 3D and different technologies can spell the situation of machine-

controlled production and services to advanced economies wherever capital is

cheaper. This trend poses a elementary challenge to the expansion and employment

prospects of the many developing countries which needs imperative attention.

There is a factual risk that technological alteration could exacerbate

difference as huge teams of individuals become disconnected for the reason of

illiteracy, absence of broadband, and lack of access to calculating technology.

Even for individuals who have access to updated technologies, there are apparently

to be vital penalties. As civilizations modification faster, a lot of and a lot of

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persons risk being left late. however, this risk is accomplished over the

approaching period will be central for

Apple’s portion with International Trade:

Apple at the side of alternative producing corporations has taken producing

overseas to reduce prices and improve efficiencies. several of the upstream

elements and subassemblies also are factory-made in China and southeast Asia, so

to try to final assembly within the USA would produce huge logistic challenges.

China additionally has abundant larger and a lot of nimble factories than within the

USA. Labor is commencing to become a problem during peak seasons, sometimes

over the summer thanks to the massive range of producing corporations trying to

find labor. corporations are competitive for moderately “skilled” labor to satisfy

the stress of product launches. throughout an iPhone launch contract maker got to

hire or re-allocate around 250,000 individuals to figure on finally assembly of the

new iPhone. There also are all of the upstream suppliers who also are in want of

staff to figure on their sub-assemblies and elements that go in the finished sensible.

Apple currently pays a premium on prime of remuneration to their contract makers

to confirm that they receive the labor required to not delay production. Even with

China’s population it is still a challenge to satisfy the stress of labor once

numerous corporations are competitive for the labor. Apple is presently heavily
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weighted in China for final assembly producing, however if there have been any

changes in government laws or tariff rates as expressed by President Trump, it

might place Apple at a big disadvantage to obtaining product to customers in a

very timely manner and take a massive hit to margins.

Apple’s current strategy:

Apple has done tons for the USA economy and percent aside from moving

jobs overseas. For the short-term Apple has created tons of jobs among the us

outside of manufacturing its hardware merchandise. Apple has several different

areas of business wherever it's created jobs among Apple and also the rest coming

back from suppliers and developers. Apple has created over 2 million jobs among

the us and has spent over $50 billion with United States of America suppliers

For the middle term, Apple has begun to verify different countries to do their

final assembly production. Apple is wanting to provide in different countries, not

simply to cut back costs however to additionally increase revenues. iPhone market

share in India isn’t within the prime 5 smartphones thus there's an outsized chance

to ascertain its complete with the world’s second largest inhabited country. India

could be a robust candidate as a result of the labor wages are just about twenty fifth

the value of labor in China, they need the expertise and ability to quickly learn the
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producing method for iPhones, and that they have the power to stay up with labor

demands throughout peak seasons.

President Donald Trump and Apple chief executive officer Tim Cook met to

debate Apple’s way forward for producing overseas. President Trump claims that

Tim Cook has secure to create three massive plants within the us. Apple continues

to explore its choices of wherever to manufacture primarily based off of prices,

complexity, potential and capability. manufacturing within the us poses different

risks like speed to promote, magnified prices, and producing flexibility.

Recommendations:

I think the Apple management team ought to create an even bigger effort to

clarify the advantages of manufacturing overseas apart from prices. advantages

embody international opportunities to its staff, speed to market for its customers to

possess the newest and greatest technology, and efficiencies within the provide

chain with the sub-component suppliers. Apple ought to additionally promote the

number of foreign employees they need sponsored to figure within the us to feature

to the country’s diversity and accomplished population.

I additionally suppose that Apple has to ban beside other producing

corporations like Microsoft, Alphabet, and Amazon to contest the present

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President’s goals of transfer all manufacturing back to the USA and “making

America nice again”. To bring that abundant manufacturing back to the USA

would be a forceful change that might cause the businesses to take a position a big

amount and money and resources toward the pull away and also the country might

not be able to sustain with the high demands of skills and labor required to provide

all hardware merchandise.

Conclusion

Globalization brings a key benefit—it stimulates the spread of information

and technology, serving to unfold growth potential across countries. however

interconnectedness intrinsically is not enough. The assimilation of foreign

information and also the capability to create on that most frequently needs

scientific and engineering power. Investments in education, human capital, and

domestic analysis and development are therefore essential to create the capability

to absorb and with efficiency use foreign information. It conjointly needs an

applicable degree of protection and respect of holding rights—both domestically

and internationally—to preserve the flexibility of innovators to recover prices

whereas guaranteeing that the new information supports growth globally. we have

a tendency to mentioned during this article example of that as In my opinion,

economic process and beliefs are two vital factors of Apple that act with one
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another. The ideology of Apple requires that the engineers pay a lot of attention to

boost their product’s performance and repair. Then, they distributed their

merchandises throughout a world trade. more and more shoppers can give their

experiences and suggestions to assist Apple good their product. the method of

interaction may be a circulation so as to create Apple more eminent.

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