Sunday, March 1, 2015

IST 1100 Module 7

Part of the Flattening process in the world economy was for individual countries to find their comparative advantage and exploit it.  Perhaps some countries didn't actively look for it, maybe they just fell into it.  Either way there are several factors that can give one country an edge in certain areas of international commerce over another.  Without this comparative advantage, or competitive edge, there wouldn't be a need for international trade, outsourcing, or offshoring.  The whole reason for these things is because one country can offer something that no other, or few other countries can.  So the question is "Why are some countries or regions better at doing some things than other countries or regions?"  A big reason for this that Friedman mentions is a countries, or cultures, openness and willingness to change and evolve.  This gives them an advantage and can make them better than the competition.  He uses the example of generations adapting to getting higher levels of education.  There are geographical advantages, certain crops can only be grown in some places of the world, so that gives them an unprecedented advantage in that area.  Culture can make a difference, what are individuals expectations for monetary compensation?  If a country will do the same work for less money, that gives them an advantage.  Government regulations and taxes can hurt or help countries in their thrive to compete.  If the country doesn't accommodate small business growth and innovation, it doesn't matter how smart the residents of that specific country are, talent and brain power will be wasted because of foolish politics. Some advantages will come naturally, others must be worked for, this is the nature of comparative advantage.

The idea of the self-directed consumer is really wear commerce is going, at least e-commerce and large portions of every day sales interactions.  A self-directed consumer is in essence an employee of the company, at least a temporary employee that does some of the work for the company.  With electronic payments and internet browsing a company can just list all available products on a website, kind of like a big buffet of goods set before us.  Instead of needing a waiter to come and be the middle man we choose what wee want, how we want it and pay for it, all without ever having to interact with a single soul.  Things were very different before the flattened world came around.  things are much more efficient and slick, on both the part of the seller and the buyer.

The last question was if globalization meant Americanization?  That is an interesting question, I think the simple answer is no.  I mentioned comparative advantage, if countries became American clones, there wouldn't be the diversification needed to create a healthy international economy.  However, America is the greatest Country on earth with the most opportunity, so as countries develop and enter the flattened world they are becoming more like America in many ways.  So I don't think this is a cut and dry question, it can be looked at in a few ways.  I think the more "Americanized" the world becomes, the better off all of earth's inhabitants will be.  I still feel that unique cultures and strengths is what makes a powerful world trade system.  




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