Globalization has greatly impacted the manufacturing industry. The manufacturing industry is a crucial aspect of the global economy as it contributes to the creation of employment opportunities and the production of goods and services. Globalization has made it easier for businesses to reach a wider market and increase their production volumes, but it has also brought some challenges.
Initially, globalization presented an opportunity for manufacturers to expand their operations to countries with low production costs. This was due to globalization facilitating the movement of goods, people, and services across borders. The lower costs led to increased profits as manufacturers could produce more goods for lower prices. The increased production led to more job opportunities; however, the impact of this has been both positive and negative.
Due to globalization, manufacturing industries have had to compete with other companies globally. This has led to a rise in the competition, causing companies to look for innovative ways to increase production output, especially in emerging markets where production costs are low. To produce more goods and compete with other manufacturers globally, many companies have had to automate their production lines. This, in turn, has negatively impacted the manufacturing industry as the demand for unskilled labour has significantly decreased.
Globalization has also facilitated the outsourcing of manufacturing jobs to other countries. This trend has greatly affected developed countries, particularly the USA and the UK, where manufacturing employment has significantly reduced. The trend has been moving towards service-based economies, such as finance, technology, and entertainment, where jobs can be created locally. This shift has led to an imbalance in the global economy, as developed economies are losing jobs to emerging economies.
Maintaining technological innovation and development has been another challenge for the manufacturing industry. With globalization, the pace of technological innovation has increased. Manufacturers have had to stay up to date with the latest manufacturing technologies to remain competitive globally. However, small companies especially in underdeveloped countries have not been able to keep up with the rapid technological changes, causing them to lose market share.
Globalization has also resulted in the increased standardization of manufacturing processes. This has led companies to move their operations to countries where production costs are lower. As a result, there has been a decline in the diversity of product lines, as multinational companies such as Coca-Cola, Apple, Google, and Amazon have expanded globally. Local manufacturing companies are finding it challenging to compete with international manufacturers as consumers prefer multinational brands.
In conclusion, globalization has had both positive and negative impacts on the manufacturing industry. While it has led to increased global economic activity, job creation, and cost reduction, it has also created an imbalance in the global economy, contributed to the decline of local manufacturing companies and lost jobs in developed economies. It is important to note that with the increasing pace of globalization, manufacturers must be flexible and adaptable, maintain technological innovation, and remain competitive to thrive in an ever-changing global market.