Economic delocalization is a transfer of activities, of capital and of employment in areas of a country or of the world which have competitive advantages. Delocalization consists of separating fabrication areas and transformation products areas of consummation country. The production is delocalized in other countries and thus the phenomenon of delocalization offers employment to foreign people. That is why increase of unemployment in developed countries is explained by delocalization. Entrepreneurs produce where it is cheaper and sell where there is purchasing power. If the delocalization phenomenon is very old – companies began this movement in the 60s- it developed in the 90s thanks to the decrease of transport costs, the improvement of communication techniques and market globalization.
[...] In some host countries it seems to be advantageous to receive new ways to produce because people can learn new methods and in the future develop it for their companies. Moreover, some companies offer formation for local population. III. Inconveniences: delocalization can have harmful effects on economy However, for both, potential negative effects need to be taken into account. For home country Increases unemployment In developed countries, delocalization introduces controversy. Indeed, globalization is one of the causes of a bad economical conjuncture. [...]
[...] Opportunity to implant new markets Setting up a company abroad provides possibilities to implant new markets, to know better population needs and in consequence to obtain more sales in the host country. Indeed, it is a way to develop new products and to obtain more gains. It is a gage of development of the company. On the other hand, presence in important markets offers the possibility to avoid tariff- jumping such as exportations legislations, taxations, etc. A way to respond to consumers' needs The development of delocalization can be explained by consumers' preoccupations. [...]
[...] We can explain this change of situation by the increase of energy and the price of raw materials. In addition, the price of transports to Europe is not very reliable because of the price of oil which has been increased. Above all, with the crisis, companies do not have huge stocks and it is another cause to relocalize and produce little to respond to the demand. On the other hand, relocalization can enable to control quality of products with better attention. [...]
[...] We will see that delocalization can provoke positive consequences for companies and consumers but it can have harmful effects for the economy. To illustrate this observation, we will use a concrete example of delocalization and to finish we will focus on the recent trend. II. Advantages: Industrial activities and services delocalized out of the national territory can provoke beneficial consequences for companies and consumers For home country According to companies, home countries generally benefit from off shoring and we are going to see the different benefits. [...]
[...] On the other hand, delocalization can be considered as the source of unemployment in home countries and exploitation of workers in developing countries. So delocalization in this case seems to be harmful. To analyze these two different visions we can say that, in fact, delocalization can be a good strategy for companies but with some rules. Indeed, it must respect the workers' rights in developing countries. In addition, for general economy, companies must employ national workers who need jobs to be able to consume. [...]
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