Global Competitiveness

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Global Competitiveness

As the world becomes a smaller place, economies are shifting away from national economies to global economies. Robert Reich, Ira Magaziner, and Michael Porter each offer a different view of how a company remains competitive in this global economy. Reich stresses the difference between American-owned corporations and American competitiveness. Magaziner highlights the growing need of innovation and the avoidance of national complacency. Porter focuses on his diamond of national competitiveness.

While Whirlpool is an American owned company—the company’s headquarters and upper management all operate out of America—the majority of the company’s factories and production lies overseas in South America and Asia. Similarly, while Toyota is a Japanese owned company, it has increasingly manufactured its cars within US borders. Whirlpool is an American company but does not benefit American competitiveness. Reich maintains that “foreign-owned businesses that benefit national competitiveness most are those that commit their engine of competitiveness to the host country.” Whirlpool may be American run, but Toyota’s factories in America create American jobs and train an American workforce, both commodities in national competitiveness. Reich further emphasizes the importance of a skilled work force: “A nation’s most important competitive asset is the skills and learning of its work force…[and]…National policies should reward any global corporation that invests in the American work force.” Stressing the skilled work force, as Magaziner has noticed, is not just an American necessity.

Magaziner gives two examples of countries who take national pride in training the work force: Korea and Singapore. Bo...

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...ompanies cannot compete, Tonelson gives two credible reasons for trade barriers. First, infant industries will have a chance to develop and one day be able to compete on a global arena. Second, hurting industries will have a chance to revamp their productions, regain efficiency and once again compete with the foreign product. On the other hand, Krugman believes that most nations use trade deficit and international competitiveness as a political ploy to impose trade barriers. Each country’s economy depends on the population within the country, not on what other countries are doing. Nations should thus not impose any trade barriers so that the foreign competition could both stimulate and replace inefficient companies. Meanwhile, nations should upgrade their workforce to efficiently produce goods that ship to other countries, creating a mutually beneficial cycle.

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