Friday, 16 July 2010 20:25
Expanding by Production Sharing
Developed countries have fulfilled their basic needs and they are going after the high information and technology now. In these countries, the capital stock and the management information and experiences has reached a high level, the labor requirement has changed from labor-intensive into knowledge intensive. There’s a reduction in number of the employees who use intensive labor to provide input to the production here; thus the companies that have developed technology, saved background and experiences have difficulty in the increase of capacity since they can’t find employees at the top positions they reached.
In contrast to the case in developed countries, the capital stock and the management information and experiences are still limited in developing countries. To sustain the development here, the most important issue that should be solved is to increase the value-added production. In order to increase production, first the domestic consumption should increase and for that to happen, the employment and conclusively the internal revenue should be raised. Raising the internal revenue depends on the exportation and the exportation depends on the internationally accepted product and to procure acceptance of the product depends on the brand. Creating a brand requires patience, effort and background. The first step of the strategies of developing countries is that they cooperate with the countries creating a brand.
With production sharing, the integration of the background of developed countries and the labor force of developing ones is important for economic growth to be maintained globally and it is becoming widespread all around the world. Now, it’s questioned that what is the brand of the products rather than who produced them.
Developed countries have to perceive the needs of the other markets and design suitable products to extend their sales by using their background. The development of the product that will be sold at different regions of the world is as important as the products’ marketing according to various customer behaviors.
As innovations and marketing are a must for those looking for different markets to their products, the others are trying to persuade these companies to investment. For an investor to make investment in an unfamiliar environment, it is necessary that this investor believes the environment’s safe and the need is sustainable. Since the prior aim is to guarantee the revenue for investment in a foreign country the governments of developing countries have to provide various types of encouragement and support for the investors by setting up the background. Otherwise, the investor who doesn’t want to settle to slippery slope will choose a safer harbor.
On the other hand one of the most important subjects that influence the investor’s investment decision is qualified labor. In developing countries, although labor is ready to work under harsh conditions, the efficiency is low. To increase the efficiency, training is necessary and for training willpower and budget is required. Thus, the country that wants to attract investors has to create qualified labor.
The country that attracts foreign investors, by means of the partnerships it associates in time and by absorbing the accumulated information and technology it gets a chance to take it further. In this way it gains the potential to create a brand. The company that has the potential to create a brand begins to transfer investments to the others. The government that is after increasing the global brand estimable supports its company in foreign countries. Since it is the success of not only the company but also the country.
The countries trying to protect their domestic markets with custom walls until recently are removing the borders and liberalizing trade now. With the agreements made, trading between countries is encouraged, accordingly the investors are encouraged to make investments in different countries rather than their own countries.
Now the game is not only between companies. The non-governmental organizations, politicians, ambassadors of the countries endeavor to develop foreign trade by taking actions to improve the economic relations and support the sales of national brands. Today, the consumers from Europe and U.S.A. are using the products made in Turkey and Turkish companies are trying to increase their market share worldwide.
From now on the companies with competitive products and sufficient management experience will go to foreign markets as far as possible and will produce with local labor and sell and globalize by using their abilities of marketing and innovations.
Having a global company will be the most important criteria to be a developed country.
