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Globalization and American Productivity

Introduction

Economic globalization is reflected in such trends as foreign sourcing, global markets, and multinational corporations. It has positively shaped many countries as they gain from mutually beneficial cooperation. According to Erixon, “globalization has improved businesses, living standards and the performance of the entire economy” (Erixon 2018, 3). Large American brands utilize the global workforce, global supply, and international markets to gain higher profits and become more competitive. It is common when the US brands use a foreign workforce to outsource marketing or IT processes or import raw materials and constituted parts. Even those companies that locate their manufacturing facilities and headquarters in the US are impacted by globalization, as it influences market prices and trading conditions worldwide.

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Overview of Products

The end-products chosen at the Walmart website are manufactured by American corporations with different extent of global influence. The first item under consideration is a pair of training shoes produced by the US company Nike (Nike Tanjun, $51.00). Nike is a multinational brand that is known for its global strategy, which is based on foreign sourcing. The corporation has its manufacturing facilities in 40 countries in South and North America, Europe, Africa, and Asia, with more than a million workers worldwide (Nike Inc). Interestingly, only about five thousand of their staff are employed in the US. Salvatore claims that foreign sourcing is not a benefit for many companies, but an absolute necessity that helps them to remain in the competition (Salvatore 2017, 104). Although the chosen training shoes are labeled as the American-made, they cannot exist outside of the global context. It is globalization that made Nike so competitive and allowed them to produce such items and sell them for a relatively low price.

Bose is an American brand that is known worldwide for its audio equipment of premium quality. A pair of Bluetooth headphones picked at Walmart website (Bose QuietComfort 35, $349.00) is engineered in the USA. Although Bose produces almost all of its products for the US market at their Massachusetts facilities, they utilize imported constituent parts from foreign suppliers. Bose owes its stable economic base to the cooperation with multinational car manufacturers, such as Honda or Nissan. The global labor market and international supply shipment strategy allow the company to stay competitive and resilient in the USA and abroad.

The last of the picked products is the razor Gillette Mach3 Turbo. Although Gillette boasts that its products are made exclusively in the USA, the rumors spread that the company also makes use of foreign labor markets. The razor, as the end-product was manufactured in the US, but some of its parts and raw material could be imported. Even without the traces of foreign influence, Gillette products speak of the state of globalization that impacts American productivity. The item costs $7.97 (a razor and two blade refills), but it is unclear what the price would be if not for the global market influence. Scholars prove that globalization has created new business opportunities that reduce consumer prices worldwide (Erixon 2018, 10). Moreover, Gillette is now a part of multinational corporation Procter&Gamble, so it is affected by its policies.

Conclusion

The overview of American-made end-items demonstrates that large brands cannot function in isolation and need to engage in the global market. US-based manufacturers utilize foreign labor markets where they can employ cheaper workforce for production, marketing, or IT support. Moreover, selling their products worldwide makes them more competitive and affects prices. Thus even the items made on the US-based facilities are influenced by global trends and market tendencies.

Russia in the Global Market

Introduction

Modern-day Russia adheres to an assertive political strategy with limited connections with the West. Gould-Davies claims that this approach does not lead to success as “prosperity cannot be achieved without deeper international economic integration” (Gould-Davies 2016, 1). Nevertheless, the country’s leaders aim at limiting foreign influences and minimize the weight of the global market. Thus, fundamental structural changes are needed for Russia to leverage globalization. Success can be achieved through three major steps – enhancing global trade, outsource manufacturing, and political integration.

Steps to Globalize Russia

Integration into global trade has the potential to boost economic growth and output of Russian companies. Moreover, cooperation with international companies can drive innovation and technological improvements necessary for Russian manufacturers. That is why Russia needs to focus on global markets where they can find new consumers. However, the country should participate in global trade organizations to be competitive. Besides export trade, the import of foreign products should also be supported. Gould-Davies supports reducing control of financial and commercial operations across borders” (Gould-Davies 2016, 1). The presence of international brands on the local market will improve competition that will lead to a higher quality of local products.

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Russia is a vast country with extensive natural resources and labor markets which are not used to their maximum extent. Although gas and oil are actively extracted, most of the far eastern regions of the country are characterized by low economic activity. Russia participates in the Belt and Road Initiative development, which creates job opportunities for the country, but its overall involvement in international projects is limited (Coulibaly, Erbao, and Mekongcho 2018, 127). As it is costly for the state to build more production facilities that would reinforce the economy of distant areas, some foreign investors would be glad for such an opportunity. The promotion of source manufacturing for international corporations would improve the economic opportunity of the population resulting in a higher quality of life and consumer capability.

The success of the global integration of the Russian economy directly depends on the country’s political strategy. As a result of its recent military conflicts, Russia has made a number of enemies among influential governments. The countries that are leading in the global economy have imposed severe sanctions that restrict trade opportunities. Moreover, Russia was excluded from G-8 (currently, G-7) and lost the support of several other international organizations. It is evident that the Russian government cannot improve economic relations with the West until the political tensions are resolved. Those military conflicts have questionable benefits but substantial costs for the country’s economy. Refusal from such struggles would stop the crisis in the relations with the West and remove the sanctions. As the Russian economy significantly depends on the global market, especially oil prices, it is essential for the country to prioritize its economic welfare over military influence.

Conclusion

The direction where Russia is currently going will likely result in significant losses for the country’s economy. Minor changes will probably turn out to be ineffective for the revitalization of the country, so several fundamental transformations are necessary. First of all, Russia’s economic situation depends on its political choices. Ongoing conflicts with other countries deprive Russia of trading opportunities, so the change in the political strategy should be the primary solution. After the political crisis is resolved, international trade should be promoted. Additionally, the government should invite foreign investors to utilize the labor force and natural resources through mutually beneficial contracts.

Reference List

Coulibaly, Salifou K., Cao Erbao T., and Metuge Mekongcho. 2018. “Economic globalization, entrepreneurship, and development”. Technological Forecasting and Social Change 127: 271-280.

Erixon, Fredrik. 2018. The economic benefits of globalization for business and consumers. Brussels: European Centre for International Political Economy.

Gould-Davies, Nigel. 2016. “Russia’s sovereign globalization: Insulation, influence, and decline”. PONARS Eurasia Policy Memo: 1-6.

The World Bank. 2019. “India: Data.” Web.

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Li, Li. 2015. “The Indian growth model: A Chinese perspective”. In India and China in the Emerging Dynamics of East Asia, ed. G. V. C. Naidu, Mumin Chen, Raviprasad Narayanan, 59-76. Cham: Springer.

Nike Inc. 2020. “Nike Manufacturing Map.” Nike Sustainability – Interactive Map. Web.

Salvatore, Dominick. 2017. “Globalization, the new economy and growth in the leading industrial countries”. In Finance Markets, the New Economy and Growth, ed. Luigi Paganetto, 103-120. New York: Routledge,

Singh, Didar A., and S. Irudaya Rajan. 2016. Politics of Migration: Indian Emigration in a Globalized World. New York: Routledge.

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