Example Of Essay On Globalization: Migration & Socio-Economic Changes
Over the past twenty years, the world has become increasingly interdependent and interconnected. As economies began opening their doors to foreign investment and capital, we began to see enhanced global competitiveness. The unbound circulation of goods and services across borders resulted in an increased flow of capital and a movement of jobs. In today's world, a clear manifestation of economic globalization is becoming a growing migration mobility of the population of the planet. Overall, the world is a global migration system, which consists of regional migration systems. Currently, there is complicated relationship between migration and socio-economic changes. Migration processes are one of the main factors of social change and development in receiving countries as well as in their countries of origin.
Advances in communication technology is one of the main reasons that globalization has escalated in the last decade. Technology has altered the way that people do business, decreasing time and space. However, whether or not this is helping or hindering economies is debatable. Some argue that globalization has enriched the world and benefited economies overall. Others disagree, arguing that free markets have perpetuated inequalities. Economists, Thomas Friedman and Richard Florida appear to clash with their theories of technology advancement and globalization, arguing whether or not the world is ‘flat’ or ‘spiky.’ However, with the movement of offshoring jobs to other countries and the clustering of jobs within the United States, the real question is: what is the future of jobs in America?
It should be noted that economic globalization facilitates economic integration, contributes to economic openness, encourages institutional reform and therefore drives the labor force in different countries. Economic globalization is carried out in the following areas: trade (goods and services), finance (investment, capital flows), communication (information, education, technology) and so on. The problems related to international migration, including labor, is described in numerous books and articles in various countries around the world.
In his book, “The World is Flat: A Brief History of the 21st Century”, Thomas Friedman argues that the world is “flat,” meaning that due to the rapid advances in communication and information technology, there is now a leveled playing ground with international commerce. When it comes to business, it no longer matters where you are located, developed, developing, and non-developed nations all have the ability to compete in the free market. There are no longer obstacles that prevent people from communicating and collaborating on a global level. For example, with the advent of the internet, people can now bridge distance and have face-to-face conversations via video messaging, regardless of location. Friedman believes that outsourcing has positively affected opportunities for people in countries such as China and India.
In recent decades, governments in developing countries encourage international business. From their point of view, overseas employment opportunities can provide relatively well-paid employment, which helps those societies that are trying to cope with the rapid growth of their populations. In some countries (Egypt, Sri Lanka and India) the education system prepares a significant number of highly educated professionals who have a problem with jobs. Providing employment for unskilled and skilled workers for emigration solves the problems of the domestic labor market and provides cash inflows from migrant workers.
Globalization has created economic growth on a worldwide scale. Multinational Corporations can now conduct business in numerous locations as they operate from satellite offices. We have seen how outsourcing can create jobs in struggling countries generating economic development. Improved travel such as shipping cargo and rapid advancements in technology, like the birth of the Internet, have facilitated in our new globalized society, contributing to a rise of blended cultures. As Professor Gaonkar, mentioned in one of his lectures, food chains like McDonalds can be found in countries like Japan, we see the growth of companies around the world. Between cell phones, and satellite television, technology is contributing to the diminishment of time and space around the world. We are all interconnected though the movement of virtual goods. This may positively benefit developing nations and the profits of Multinational Corporations however, its effect on the American economy is questionable.
In contrast to Friedman, Richard Florida argues in his article, “The World is Spiky”, that location does matter and the concentration of economic activity makes the world ‘spiky.’ He uses the term ‘spiky’ in addition to other topographical phrases (peaks, emerging peaks & valleys) as metaphors to describe divide throughout the world. ‘Peaks’ are the cities that generate innovation, such as Silicon Valley, the technology capital of the world. The ‘emerging peaks’ are the “industrial and service centers that produce mature products and support innovation.” They are usually unstable and can rise and fall quickly; an example would be call centers in India. Call center, which were once predominantly offshored to India, have now made the move to the Philippines where the labor arbitrage is better. ‘Valleys’ describe the “mega cities that have large population concentrations but a lack of economic activity to support their people.” The economic inequality in cities like Mumbai, India is mind-blowing as the gap between rich and poor is so vast that it is said to have created two distinct societies within one. There just are not enough jobs to sustain a population of that magnitude. Florida believes that only large cities around the world have benefited from technological advances, arguing that the innovative cities continue to attract talent from around the world, creating a spiky world.
Similarly, in his book, “The New Geography of Jobs,” Economist Enrico Moretti argues that as the global economy shifted from manufacturing to innovation, some cities rapidly became more successful than others. Moretti argues that within the innovation concentrated cities like, Austin, Silicon Valley and Durham, the growth domestic capital is higher, creating a clustering effect. He attributes the clustering to three fundamental factors. First is the thick labor market effect. If you are in a highly specialized position, you want to be in a city where there is a strong labor market, employers looking for employees and employees looking for employers, thus creating a more productive and innovative labor market. Secondly, you need specialists to service the specialist (the best for the best). Lastly, there is the human capital spillover. You are always near people who are at the forefront of innovation and naturally, there becomes a sharing of information. Therefore, the innovation tends to attract more workers, which in turn strengthens the circle.
At this point, there appears to be no correct answer as to what is best for Multinational corporations or economies. We live in a very imbalanced world. Companies like Apple, General Electric and Stanley tools have all taken different approaches to tackling the new challenges brought about by globalization. Apple Inc., who once boasted about producing their products in America, now employs 20,000 people overseas. Apple argues that there is no American plant that can match the speed and flexibility of factories overseas. With loose labor regulations, sending jobs overseas allows for companies like Apple and Wal-Mart to reap the profits. While Apple believes that “profits and efficiency have trumped generosity,” some economists and companies like General Electric believe otherwise. In contrast, other companies believe that in order for a company to thrive, they need to be able to innovate. After years of outsourcing their manufacturing abroad, General Electric, led by CEO Jeffrey Immelt, had a new business model focused on innovation that would bring jobs back to the US. Moretti argues that to “remain prosperous, a society needs to keep climbing the innovation ladder.” Economists argue that as with the iPhone, the real money is in the design.
Moretti refutes the theory of the death of distance arguing that, “a company’s success depends on more than just the quality of its workers – it also depends on the entire ecosystem that surrounds it.” In terms of education, Moretti recognizes the correlation between income and a college degree. He writes “One way to correct this market failure is to provide subsidies for college education.”
It should be noted that the transition to a new type of economy (post-industrial society) significantly increased the role of skilled labor. The natural consequence of this process is the emergence and rapid development of an international market of highly qualified specialists, especially in the field of information technology, which is accompanied by the growth of intellectual clustering. This has led to a natural movement of the human capital in the global labor market. As previously discussed, this is exactly how the cluster in Silicon Valley has been described.
Labor effects of economic behavior influence intellectual clustering. From an economic standpoint, international labor movement can be considered as a universal mechanism for the redistribution of labor in the global labor market. There are various concepts that characterize the features of the manifestation of this mechanism.
Highly skilled workers, as opposed to unskilled workers, much less rely on migration networks based on family and national ties. For their migratory movements around the world, there is much more important ties like professional connections. There are relocation networks with new quality-based educational and professional components.
Clusters of highly qualified specialists have different directions. In addition to a steady stream of intellectual clustering from developing to developed countries, there is considerable migration of professionals between the developed countries and the flow of migrant professionals from developed to developing countries. Overall, we can see the increased movement of capital and labor as the world has become increasingly interconnected due to the rapid advancement of technology. There is no clear solution in the way that Multinational Corporations should conduct business; it continues to be of debate amongst economists. As seen with General Electric and Apple Inc., each company has a different way of approaching business in the integrated world. However, one thing is certain, that nothing in life is static, everything is always changing and evolving over time.
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