How Global Business Expansion Is Driving International Job Markets
In today’s world, the interaction among domestic and foreign companies is undeniable, especially in the manufacturing sector. Many years of globalization are now showing positive results. These results include not only growth in many countries’ gross domestic product and a boost in the number of exports, but also an increase in the number of jobs being created in the global economy.
Although a controversial agreement, the North American Free Trade Agreement, or NAFTA, is blamed for a wave of job losses at the time. However, this agreement was in place when over 26 million jobs were created in the United States between 1993 and 2007. The average unemployment rate declined two percent in the U.S. alone. The increase of exports due to NAFTA contributed to wage increases between 13 and 16 percent over national averages in export-related industries. Two current trade agreements, the Trans-Pacific Partnership and the Trans-Atlantic Trade and Investment Partnership being debated in Congress now, would make global markets more accessible for companies, especially small businesses. Small businesses would then have more accessibility to markets making up two-thirds of the global economy. Small businesses make up the majority of employers in the U.S. Such trade policies promoting expansion of markets will also increase the Gross Domestic Product (GDP). When such a change occurs, job growth likely to occur to meet the new demand of products and services.
Higher Wages and Higher Productivity
Companies becoming more globalized are gaining market share over competitors in addition to being able to provide higher wages to employees. Higher wages stem from the increased sales to international customers. The need for more workers to help reach all of the newly accessible markets will create jobs in these international market participants. In turn, the higher wages spur higher productivity in workers.
Emerging markets in developing countries are some of the only where positive economic growth is occurring. Global market accessibility for both products and services of these growing markets are allowing expansion of their market economies to happen faster than ever before. Although many of these countries have high rates of unemployment, they are also some of the only ones to see steady decreases in these rates as more industrialized countries still struggle from the effects of the financial fiasco in 2008. Despite how slowly theses decreases may be materializing, they still represent growing job opportunities. A good reference for more discussion in this area is www.jobapplicationguide.com.
In addition, foreign investors are drawn to an emerging market’s high risk, high reward investment opportunities. Venture capitalists, in particular, seek such investments and are creating various strategies, such as “impact investing,” to tackle some of the risk. Job creation is a particular social impact the impact investing strategy targets. Currently, such impact investments account for only less than one percent of managed assets in these developing markets.
Global business expansion offers new hope for creating jobs. Although such expansion involves high risk for high yields and may present many challenges and obstacles, the positive job growth resulting is well worth those efforts.