Group 1 PPT 1

Learning to Specialize in the New Global Economy

Images Courtesy of: “Made in” https://www.1min30.com/wp-content/uploads/2014/06/made-in.jpg “Dominican Logo” http://studycalifornia.us/school/dominican-university-of-california/

Group 1: Rick Asfoor, Jelani Bertoni, Joshua Johns & Ami Thomas

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Offshoring VS Outsourcing(Bla

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Learning to Specialize in the New Global Economy

“In its broadest sense, offshoring involved the transfer of job activities abroad…” (The Offshoring of America Case Study)

Possible Solutions:U.S.

- Rethink Current Education Systems

- Spread Work Ethic, not US Jobs

- Expand Free Trade

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Learning to Specialize in the New Global Economy

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http://americanfreepress.net/?p=18148

Incentivized Offshoring

Learning to Specialize in the New Global Economy

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http://i.usatoday.net/communitymanager/_photos/green-house/2010/04/21/oildependencex-large.jpg

http://acivilamericandebate.com/2011/04/10/the-30-year-growth-of-income-inequality/ Learning to Specialize in the New Global Economy

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http://ushistoryatlas.com/era10/USHAcom_G_U10_nafta.cfm Learning to Specialize in the New Global Economy

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Offshoring and Mexico

From the Case:- North American Free Trade

Agreement (NAFTA)

- Foreign Direct Investment in Maquiladoras increased

- U.S. access to cost efficient manufacturing

- The Offshoring Argument

Learning to Specialize in the New Global Economy

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“NAFTA” Image From http://immigrationcanada.pro/wp-content/uploads/2013/09/usmexicocanada.jpg

U.S. & Mexico Today

- Mexico is the 2nd largest export market for the U.S.

- North American Leaders Summit

- Mexico-U.S. Entrepreneurship and Innovation Council (MUSEIC)

Learning to Specialize in the New Global Economy

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Image Courtesy of: https://pbs.twimg.com/profile_images/458292458011373568/7V0tK6lT_400x400.jpeg

China

China’s Special Economic Zones

-Special Tax Incentives

-Relaxed Chinese Labor Laws

-Liberal Economic Policies

-Import of Technologies & Management Skills

Learning to Specialize in the New Global Economy

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Benefits to China’s Offshoring Efforts

- Outward Bound exports of China’s foreign investment increased from 1.1 Billion in 1985 to 57 billion in 2005.

- China’s economy grew at an average annual rate of almost 10% for 29 years.

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Learning to Specialize in the New Global Economy

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Negative Effects on China’s Offshoring

- Arable land was being used for development and industrialization, which forced small landowners and farmers to vacate their property.

- In 2006, the United Nations Environmental Program labeled one particular SEZ, Shenzen a “Global Hotspot”

- Accelerated economic development created regional disparities, which led to economic and social problems

- (2007- Mattel Corporation was forced to recall

over 13 million toys due to lead based paint used

by a vendor, in order to cut costs)

Learning to Specialize in the New Global Economy

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Recommendations/ Solutions

- Incentivise companies that promote the highest standards for environmental and social practices.

- Place a cap on development and industrialization for SEZ’s in order to offset the amount of farmers and small landowners who are being displaced.

- Designate a certain amount of income earned by offshoring companies to be given to local economies throughout different regions in China in order to ensure stable growth on the local level.

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Learning to Specialize in the New Global Economy

India Effects of Offshoring/ Units of Analysis

Learning to Specialize in the New Global Economy

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Domestic Foreign

Firm Level Development of strong business services and technology sector,Venture capital backed start-ups

Use of low cost white collar skills and personnel

Country level Influx of foreign capital and competition to boost economy, rising standard of living,reducing poverty

Advantage of opposite timezone from U.S.Prevalence of english simplifies international communication

India’s Opportunities -Positive influences of state policies, higher education, tax incentives, increased foreign investment, growing economy, business services and technology, financial attractiveness

Learning to Specialize in the New Global Economy

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Above:From The Offshoring of America Case

Right: From WEF Global Competitiveness Report 2014-15

India’s Challenges

-Problems of financing, infrastructure, corruption, security, poverty, domestic business environment

and cultural barriers

Learning to Specialize in the New Global Economy

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From WEF Global Competitiveness Report 2014-15

From Transperency.org Corruption Perctption Index 2014 .1

1.http://www.transparency.org/cpi2014/results2.http://www.doingbusiness.org/data/exploreeconomies/india

In 2015 India Ranked 142 out of 189 countries in terms of Ease of Doing Business. 2

Suggestions for India More attention should be focused on:

-Developing domestic businesses and markets

-Raising the standards of living/ eradicating poverty

-Utilizing tax revenues to modernize infrastructure

-Expanding educational opportunities to foster more sectors of the economy

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Learning to Specialize in the New Global Economy

Main Point: The more Indians who are educated, engaged in the economy, and able improve their standard of living, the stronger India will be as a country and the more they will be able to offer to the global economy.

Image of India Flag Image Couresy of: http://www.webinfonews.com/wp-content/uploads/2014/07/India-Flag-7.png

Conclusions For Success in an Increasingly Global Market

- Countries need guiding vision for development and specialization to remain globally competitive.

- It is important to develop and protect local markets and industries in addition to attracting investment and offshoring

- In the effort to globalize countries and firms should not lose sight of environmental and social impacts of business practices such as offshoring both domestically and internationally

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