Local vs. global production

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Local and global production

- The need to be competitive means that many companies sell their products all over the world.

- Many companies employ design teams situated throughout the world so they can design for a local market or culture.

Offshore manufacturing of multinationals

- Offshore manufacture is a driving force in the global marketplace, there is an increased awareness by multinational companies based in developed countries of the value of offshore manufacturing as a vital strategic tool.

- Many companies will draw upon the individual expertise of other countries to develop new products, particularly in the field of technology.

- Companies are relocating to less-developed countries such as India, China and former Soviet nations and outsourcing their work.

- Initially jobs in developing countries were created through the manufacture of shoes, cheap electronics and toys, subsequently simple service work.

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Local and global production

- The driving forces are digitisation, the Internet and high-speed data networks that cover the entire globe.

- Design data can simply be sent to another country for manufacture or localised expertise can provide the design and development of products.

- Why do multinationals manufacture offshore, or outsource? The answer is simple: it costs them less. It is now possible to recieve the same quality work at a fraction of the cost than if Western companies manufactured in their own countries.

- In addition, by having bases in developing countries it is possible to gain greater access to expanding overseas markets.

- This calls into question ethical issues such as large-scale unemployment in developed countries and exploitation of labour in developing countries.

- Issues relating to local and global production are concerned with the effects of the global economy and of multinationals on quality of life, employment, and the environment.

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Advantages and disadvantage of global manufacturin

Advantages

- Economic regeneration of local area through increased employment in manufacturing and service industries.

- Improvement in living standards through career development and multi-skilling of workforce.

- Physical regeneration of local area through development of infrastructure, transportation and/or local amenities.

- Widening of the country's economic base and enabling of foreign currency to be brought into the country, which improves their balance of payments.

- Enabling of the transfer of technology that would be possible with the financial backing of multinationals.

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Advantages and disadvantages of global manufacturi

Environmental issues

- Increased pollution and waste production as a result of manufacturing activities.

- Destruction of local environment to build factories, processing plants, infrastructure, etc.

Employment issues

- Lower wages than workers in developed countries where a minimum wage operates.

- Promotion restrictions as managerial roles occupied by employees from developed countries.

- No unions for equal rights issues including unfair dismissal/hire and fire.

- Lower safety standards when using 'sweat shops'.

- Devaluing of traditional craft skills, replacement by repetitive 'machine minding' tasks.

- Local community can become dependant on multinationals, leaving community devastated if the multinational pulls production.

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