Globalization

Globalization helps the U.S. economy

• creates jobs
• boost economic activity
• foreign corpations invest
• increase productivity
• new bussiness

CREATES JOBS
globalization created 5-1/2 million jobs inside the U.S.—an increase of about 30% in payrolls. That’s a significantly faster rate of job growth than purely domestic companies generated. And it shows that you can’t assume that a job created overseas necessarily means one isn’t created here. For example, expanding an overseas network frequently means you have to hire more workers in the U.S., too—people in management, logistics, research and development, and international IT.

BOOSTS THE U.S. ECONOMY
Although we may lose jobs to foreign workers, we also may gain jobs and boost economic activity. For example, data suggest that, in terms of office work, the U.S. insources far more than it outsources; that is, just as U.S. firms use the services of foreigners, foreign firms make even greater use of the services of U.S. residents. “Office work” refers to the category of business, professional, and technical services that includes computer programming, telecommunications, legal services, banking, engineering, management consulting, call centers, data entry, and other private services. In 2003, we bought about $77 billion worth of those services from foreigners, but the value of the services we sold to foreigners was far higher, over $130 billion.

INCREASES PRODUCTIVITY
Globalization can help increase productivity growth in the U.S. The example of offshoring’s effect on the spread of IT in the U.S. and, therefore, on our economic growth illustrates the point. According to one estimate, the globalized production of IT hardware—that is, the offshoring of computer-related manufacturing, such as Dell computer factories in China—reduced the prices of computer and telecommunications equipment by 10%-30%. These price declines boosted the spread of IT throughout the U.S. economy and raised both productivity and growth.

FOREIGN CORPORATIONS INVEST
Foreign corporations invest here. Specifically, foreign firms employed almost 6-1/2 million workers in the U.S. in 2001—up from about 5 million in 1991; these workers included highly paid Honda and Mercedes-Benz workers in the auto industry. There are plenty of other examples. In 2006, Toyota will employ 2,000 people building cars in San Antonio. Samsung is investing $500 million to expand its semiconductor plant in Austin, Texas. And Novartis is moving its R&D operation from Switzerland to Massachusetts.

squirrel
by:
Sarah
and
Alison