The World Is Flat, Research Paper Example

The implications of globalization vary depending upon the viewpoint of the individuals or groups that are analyzing the data. While proponents of globalization give credit to its ability to promote global prosperity, peace, stability and democracy, opponents argue that globalization provides a lengthy list of society problems, rising inequality, poverty, environmental mismanagement and a narrowing scope of democracy at home (“General Globalization”).  In other words, both sides of the argument would agree that globalization is worse off for the local area or economies, while promoting growth and benefits for the international economic marketplace.  It is the local concerns that have raised many issues with people of the United States, especially in local cities in states like Michigan where the impact of globalization is being felt in the Steel and Automotive industries.

Although globalization is supposed to promote competition through increasing the number of competitors in a much larger market, it actually has a greater negative impact on the economy closer to home.  “U.S. steel [producers] simply cannot compete with foreign steel, in part due to the lack of labor and environmental standards within foreign borders” (Wuorenmaa par. 1).  In other words, the foreign economies do not all play under the same set of rules.  While the United States has unions and fair labor practices to follow, many third world and foreign countries do not have the same laws to protect their workers.  This makes the cost of labor much cheaper, and a much better purchasing option for American companies to consider for outsourcing options.

Thomas Friedman mentioned in his book The World is Flat that there are hundreds of instances where globalization can impact our everyday lives.  He used examples of the elderly woman in Salt Lake City, Utah that was working at home for Jet Blue airlines and taking reservations for customers over the phone.  Meanwhile, McDonalds Corp. has instituted a plan to introduce a national call center where orders are taken along with the customer’s picture and then the information is sent to the local McDonalds to actually fill the order (Friedman).  The Jet Blue example is a wonderful use of technology that continues to employ American workers, while enabling them to work from the comfort of their own home. However, the McDonalds example takes technology and makes the ordering process much more efficient by eliminating employment positions within local McDonalds and cutting costs for the international company. This is a smart move by McDonalds Corp. management; however, it victimizes the local citizens that would otherwise be employed.

The impact of globalization has forced Michigan to change its view on economy and the capitalist behaviors it enacts.  Now, instead of working to turn around obsolete industries, such as Steel and Automotive, the state of Michigan is investing in efforts to improve technology and the advancement of companies operating in such fields as alternative energy, life sciences, homeland security and defense, and advanced manufacturing (MichiganAdvantage.org).  These efforts will not only help the state provide additional jobs to the many unemployed citizens that are effected by the impact of globalization, but it will also allow American companies to find alternative ways to provide economically efficient energy sources and compete in multiple global markets.  The view is no longer on just competing with national corporations, but rather developing ways to compete with international companies that may have an edge on the competition.  The solution cannot be to pay lower wages or reduce employee benefits; however, the solution may come in the form of increased technology and advancement in international markets where foreign companies may not be able to keep up.

Thomas Friedman mentioned that “the global economic playing field is being leveled, and Americans are not ready” (Friedman).  This statement is very true given the recession that this country is currently in, and showing no signs of improving.  Budgets are continually cut to adjust to the impact of the poor economy, while U.S. companies are more often than not resorting to employment outsourcing to purchase more cost-efficient labor.  Friedman is absolutely correct.  The A.T. Kearney consulting firm has developed a globalization rating scale that accumulates a number of factors into one single rating for each country’s total globalization efforts (ForeignPolicy.com).  The United States is not in the top ten on the Kearney rating system and has not been for the last several years.  The United States is not prepared for the competitive impact of globalization, and the people, government, economies, and American markets are become victims of globalization efforts.

References

ForeignPolicy.com. “The Globalization Index 2007.” Foreign Policy – the global magazine of economics, politics, and ideas. Web. 05 Oct. 2009. <http://www.foreignpolicy.com/story/cms.php?story_id=3995>.

Friedman, Thomas L. “The World is Flat | MIT World.” MIT World | Distributed Intelligence. 16 May 2005. Web. 05 Oct. 2009. <http://mitworld.mit.edu/video/266/>.

“General Globalization – Implications Of Globalization.” Science Encyclopedia. Web. 05 Oct. 2009. <http://science.jrank.org/pages/9546/General-Globalization-Implications-Globalization.html>.

MichiganAdvantage.org. “Michigan Growth Industries | Michigan Economic Development Corporation.” Michigan Economic Development Services | The Michigan Advantage. Web. 05 Oct. 2009. <http://www.michiganadvantage.org/Targeted-Initiatives/Default.aspx>.

Wuorenmaa, Jenifer K. “The Effects of Globalization on the U. S. Steel Industry.” Michigan Academian (2002). BNet.com. Web. 5 Oct. 2009. <http://findarticles.com/p/articles/mi_hb203/is_1_34/ai_n28928863/>.