How Globalization is Influencing the Manufacturing Industry


There have always been negative and positive spins on the way globalization affects each industry. Overall the effect has been mostly positive and working in a global capacity opens up a vast pool of opportunity and innovation. With the latest in technology, the world is getting smaller, and companies can run huge organizations from several locations in very different settings.

The increasing pace of global dominance is subject to many regulations and restrictions set in place by individual countries, and this can open up some challenges along the way for organizations that are looking to break into new markets. There are many areas that should be considered if you are contemplating manufacturing outside of your normal country.

Contributing to the host country’s economy

One of the main factors in choosing to manufacture abroad is a cheaper cost in both production and labor. Due to the intense media scrutiny in this area, companies would need to consider their position if this contended against any human rights or ethical compliances. Sticking to country regulations and supporting the workforce in these areas can help to not only save costs in the long run but also contribute to the host country’s economy. By providing workers with a better standard of living and more disposable income, they are able to spend more money in their home country.

The impact on the environment

This remains a hot topic of conversation at present and considering globalization on the environment is an important aspect of many modern businesses. Environmental responsibility comes as part of expanding into new markets and putting some core practices into place is key to sustaining a smaller carbon footprint. Areas such as upgrading equipment to ensure they meet new regulations and streamlining procedures to reduce waste are just some of the things businesses can do to monitor impact. Encouraging other aspects such as recycling and partnering with government bodies to ensure you always meet high standards is a great way to make a positive impact via your global reputation.

Work alongside trade agreements

Trade agreements are set in place to ensure fair policies and procedures are followed by both home and offshore companies. Trade agreements are also put in place to benefit companies and consumers, so products and services are available at a fair price. There are many agreements such as the IMMEX program in Mexico that allow foreign manufacturers to import raw materials, tax and duty-free with the proviso that the finished goods are exported out within a set time frame. This type of agreement helps to build relationships with global companies and brings work and money to the workers of the host country. There are many trade agreements across the world, and they are monitored continuously to ensure the fairest deals are in place and agreed by all parties.

Globalization continues to make products and services readily available to consumers worldwide. As the industry is ever-evolving, it is vital to keep up with current changes to make sure your company stays ahead of the curve.


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