3 Indications that Globalization is Creating Job Opportunities
Globalization’s end result is the creation of a single world market through the rapid integration of international and domestic economies. Whether or not this economic singularity is a force for good, however, is still up for debate. There’s still a lot of uncertainty surrounding global trade but there is convincing evidence that it creates a substantial amount of job vacancies.
1) It Allows Companies to Scale Quickly
There is no denying the fact that offshoring and outsourcing are direct consequences of globalized trade. It’s also clear that these processes displace a significant percentage of jobs which results in short-term unemployment issues.
The keyword here is ‘short-term.’ Outsourcing enables First World companies to generate more profit by employing workers in developing countries, in which the minimum wage is several times lower.
The surge in profit opens up more investment opportunities for businesses which grants them the ability to scale significantly faster. This rapid development generates a vacuum in the labor force that compels businesses to hire more workers. (Huart, Jean-Yves, and Loïc Verdier, 2013).
2) Offshoring Services Massively Boosts Productivity
In a study published by Global Insight in 2004, it was revealed that, “the cost savings and use of offshore resources lower inflation, increase productivity and lower interest rates. This boosts business and consumer spending and increases economic activity.”
Increased productivity and economic activity is definitely beneficial but does it actually affect employment? Well according to the findings of OECD in their 2013 study about Economic Globalization, the productivity boost from offshore companies had an interesting and staggering effect in the world economy.
While labour-intensive jobs were displaced, the productivity boost that resulted from this freed up new space for the creation of many service-related professions. From 1995 to 2003, three million new job positions opened up in Germany alone.
3) Displaced Jobs Allow Developing Countries to Catch Up
BPO companies offer job vacancies numbering in the millions to developing countries such as the Philippines and India. These jobs are displaced from their home countries though so they don’t really count as new jobs.
However, these job opportunities have rippling effects on developing countries. The injection of foreign capital, ignites the rapid acceleration of the partner country’s growth, speeding up their development process by seven-fold. (Abedian 2002).
This effect is already visible in India where an increasing number Indian call center agents are starting to earn almost as much as their US counterparts, with a diminished 15% wage disparity. (NPR, 2010)
Huart, Jean-Yves, and Loïc Verdier (2013), “Does globalisation promote employment?”, in Economic Globalisation: Origins and Consequences, OECD Publishing. Retrieved July 12, 2017
Abedian, Araj. 2002. “Economic Globalization: Some Pros and Cons.” Papers from the Sixth Conference of the International Environment Forum, World Summit on Sustainable Development. Johannesburg, South Africa. Retrieved July 12, 2017 (http://iefworld.org/dabed02.htm).
NPR, “Outsourced Call Centers Return Home,” August 25, 2010. Retrieved July 12, 2017
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