QUESTION: Has globalization had a positive or negative impact on businesses in Minnesota? Identify at least 3 reasons to support your position.

The impact of globalization on Minnesota's businesses

COLLAPSE

Globalization refers to the process or state of integration in which different countries and people of the world come together using modern technologies. Globalization made it possible to share knowledge, work, technology, idea across the globe.

Globalization positive and negative impact of businesses in Minnesota

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The Minnesota department of employment and economic development of Minnesota Technology Inc. increased sales demands of foreign market and productivity of exports for Minnesota manufacturers and the annual export around $18 billion. In 2003, that was around $10.5 billion. The foreign owned companies invested $13.2 billion in 2001 in gross plant, equipment, and property in Minnesota. Globalization is a concern today as it is attributed to massive social problems in developing nations. The destruction of rain forests, rivers, oceans, and lakes is directly related to the local environmental laws by corporations in developing countries.

The concept of globalization due to the following reasons:

Undermines wages in rich countries: Globalization encourages organizations to transfer jobs to the countries having low labor cost, such as India and China. This creates lack of jobs in the countries having high labor costs, such as the United States and the United Kingdom. This condition undermines the wage in the rich countries, as organizations are able to get jobs done at a lower cost.

Exploits worker in poor countries: Organizations, who choose to outsource jobs, often outsource jobs at a much lower cost to the other countries them the price they have to pay. That is, they do not pay well. For example, the minimum wage in the United States is about $10 per hour. While transferring the same job to India, the organization will not pay even $5 per hour. In this way, it exploits workers in poor countries by paying a price less than they have to pay here in the United States.

Causes economic recession: Economic recession occurs due to Pseudo money. Pseudo money refers to the money that a company or organization shows in balance sheets but does not actually exit in the system. For example, consider a situation in which a United States based company produces products in China and sells them in the United States. What will happen? Initially the company will accumulate wealth as well the Chinese counterpart, but over long term, it will lower the purchasing power of the customers in the United States. This will reduce sales and will further reduce the purchasing power. This cycle continues and ultimately leads to economic recession.

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