Globalization in the Apparel Australian Industry - Case Study Example

Running head: GLOBALIZATION IN THE APPAREL AUSTRALIAN INDUSTRY Institution Tutors name Grade course Date Globalization refers to the increasing union of the world's economic order by reducing barriers of international trade such as tariffs, export fees, and import quotas. Companies are allowed to import and export goods and services and sell them any where in the world market. The main factors impacting on globalization in Australia are expansion of new capital markets where they can sell there goods and services and improvement of new technology such as internet, email, mobile phones, and media. Also communication networks which helps them in networking global market, searching for available opportunities and transportation of goods and services (Callaghan, 1997). Globalization help to increase availability of non domestic goods that are not produced in Australia hence enable Australians get all the goods and services which they require in there day to day activities. Cheap labor can be imported to reduce cost resulting in lower prices in consumer goods and it also brings in investment money from other countries which helps the Australian economy grow (Callaghan, 1997). On other hand due to the export of cheap labor, the country will face a reduction in low skill job available and will have negative effects on employment. Some goods produce by domestic industries in Australia may be more valuable to other countries. This will increase the price to the local customers and lastly domestic investors may invest outside the country if it is more profitable for them to invest outside and this will lower investment in Australia's economy. The diagram above shows how Australia economy is affected by globalization it shows how imports and exports are control by government of Australia to avoid losing their sales to other nations. Globalization has affects on workplace, the workers, working conditions, and labor relations. In workplace, professional workers compete together in the world market and may lead them in commanding high wages but other workers cannot compete and command high wages. It lead to brain drains because talents are taken away by rich countries from poor countries, this has affected poor countries negatively economically. It also lead to sweatshops in that foreign investors utilize workers in those countries with lower wage rate and take advantage of cheap labor on those countries (Shanahan & Treuren, 2003). This workplace globalization has been fueled by rapid changes in technology that has made global communication faster and transport development. New technologies assist the workers in checking where labor is available. Australia government has placed duties on imported good and services to protect domestic industries from global competition, prescribed the quantity of goods to be imported, exported or manufactured by foreigners in the country. It also gives subsidies to producers in some local industries to prevent the decline on those industries and paid a sum to encourage trade. Trade protectionism and other poor economic policies has caused Australians to slip from being the wealthiest people in the world, with the highest real GDP per capita in 1913 and was rank at position 15th by 1990. Australia economy was performing well but fall in 1970s when government introduce tariffs and other forms of government intervention like giving the number of quantity to be imported and give subsidies to some local industries. Australia’s geographic isolation Increases the cost of trading this lowers the level of international trade, and Protect many Australian domestic industries from collapsing because of competition from big foreign industries. Globalization has several advantages like it increases employment opportunities for the people due to free movement from one country to another, people would easily move to countries where the demand for employment is high. It promotes availability of a variety of goods and services to the consumers; these improve the living standard of consumers. Companies lower costs because they can import cheap labor which will lower there cost and maximize profits, this will help expanded there businesses. It enable business firms to access bigger markets by reducing barriers and this allows business firms to sell there products in international market, this will give them an opportunity to sell more goods and make more profit. Globalization assist in spreading of new technologies across the world, it fastened and widen the spread of new technologies which will help in faster spread of information to different countries; This assist in understanding different opportunities available in global market and labour market. In terms of specialization, globalizations makes a country produce what they can produce best and leave other things to other countries hence improving the quality of products. This benefits the consumers because they are able to get quality goods and services hence there living standard improved. Economy has grown faster in Australia due to globalization because different companies has come to invest in Australia because Australia has high population compare to some countries which is a good market for the goods produced by those companies which are investing in Australia (Shanahan & Treuren, 2003). Globalization also has some disadvantages like; It creates unemployment in developed countries because firms move their factories to developing countries where they can get cheaper workers and maximize profit. These may affect employees in developing countries because they may be misused by those companies from develop countries. Globalization may cause problems in environmental issues since a company may build factories in those countries where environmental laws are not as strict as they are in their home country and the damages causing to the environment might not be noticed earlier. Local investors may collapse because of competition brought by foreign companies which in turn affect the economy of a country because foreign industries will dominate and may end up being decision markers in economical issues. Globalization can lead to financial problems, investors may build up new businesses and these new companies might not work well and are closed down, this will cause a loss and may discourage other investors who are planning to invest. Smaller firms may not have enough resources to compete with bigger international firms and therefore may be forced out of business, this will allow big firms to dominate in industries and drive away some small firms building up in a country (Galligan, Roberts, & Trifiletti, 2001). Globalization may make some Countries to dependent more on other countries for meeting their needs for goods and services. This can become a major problem in situations like war, they may not get basic commodities which are required by local consumers. Many developed economies have failed to adjust on the new conditions which are created by globalization. Sectors of economies in many of countries are handicapped by labor practices which are not flexible and inadequate educational and training provision, which make new investment to be less attractive this discourage new investors. The technology developments are conceived as the main facilitator and driving force of most of the globalization processes. Digital technologies have opened the way towards global networks in which all information and knowledge necessary for the realization, maintenance and the reproduction of the system. Technological change reducing the cost of transmitting and communicating information which is a major factor behind the growth of trade because they can learn on the opportunities available in both local and international market (Galligan, Roberts, & Trifiletti, 2001). Lastly advances in transport technology have decreased the costs, increased the speed and reliability of transporting goods and people by making new and growing markets to be accessible on a cost-effective basis, there has been an increase in the number of firms that locate, source and sell in international market, due to new opportunities brought by the ICT revolution, alongside decrease transport costs and make trading easier and attractive. Per capita income in Australia increases due to globalization which shows hat the living standard of people has improved due globalization. Per person income has grown at an average 3 per cent since 1991.Per person. The advantages customers get from globalization is that they are able to access what they need at the right time and place without incurring other cost hence there standard of living is improved. It enable them to get the goods and services at cheaper price because the companies are able to import cheap labor which reduce the cost and that cost is pass to customers. Due to new technology brought by globalization the customers are get quality goods and services. Another advantage bring by globalization which is beneficial to the customer is that it lower inflation this is very important because the price of goods will not increase as it could have done if the inflation increase. This is because the market rivalry stops the businesses from increasing prices unless guaranteed by steady productivity. Technological advancement and productivity expansion are the other benefits of globalization because since 1970s growing international rivalry has triggered the industries to improvise increasingly (Galligan, Roberts, & Trifiletti, 2001). On the other hand there disadvantages face by customer they may over relied on other countries on basic commodities which may not be available in time of war and conflict this will affect there business and there standard of living because they are not getting those basic commodities. Globalization in Australia has made workers able to acquire a several skills and knowledge which they can use to work tasks which fall outside their original training, this increases productivity of labor and cater shortage of critical skills and this will assist the industries if there is a shortage of employees. Australia’s trade policies, promote the opening of global market to domestic industries as early as the middle of the 1980’s, Australia have structural reform which is subjected the private sectors to be more competition on both local and international sources. Australia is one of a country which has benefited more from globalization, in terms of exports of minerals, wool and wheat and as a borrower of international capital (Shanahan & Treuren, 2003). Because Australia is located in a region surrounded by developing countries with high population they import cheap labor and export there goods and services to these countries. Australia gives developing countries technical assistance, capacity building initiatives and investment, and information communication technologies to promote active participation in the global community. Australia is trying to maximize the benefits by globalization. Australia also does not placed duties and not prescribed the quantity of goods produced by the 49 Least Developed Countries. Due to coming of worldwide production markets and easy access to foreign products for consumers and companies within national boundaries has lead to increase in manufactured goods on most of Australia industries this increase the gross domestic product of Australia (Shanahan & Treuren, 2003). Globalizations promote competition and widen the choice of consumers. However, it can be associated, in some cases, with anti competitive behavior on an international scale and this can cause problems for national governments which are having difficulties in dealing with some behavior which are taking place in other countries which may affect their own economies. The pressures from these new forces on economy of Australia make it more important than ever to apply a vigorous competition law if they are to have an internationally competitive economy (Downer, 2003). Effective Rates of Protection in Australia Years The apparel industry has become modern, well-equipped sector that is highly specialized with particular firms concentrating on particular market segments. World apparel market is largely influenced by factors, such as, globalization, ever changing consumer preferences, levels of disposable incomes, dynamic business practices, fashion trends, and technological developments in fabrics. A recent trend in the apparel market is the increasing number of companies outsourcing distribution and inventory functions to third parties, allowing them to concentrate on design and marketing. The drive to reduce production costs is additionally leading to migration of production bases to low-cost developing countries as an increasing number of apparel manufacturers and processors shift their production sites to China and other Asian countries. Development of innovative sportswear has increases there demand in global markets The apparel industry like Sportswear industries perform well due to globalization because of increase in market share, they can now sell their products in international market (Downer, 2003). They import cheap labor which in turn reduce there cost and maximize there profit. Sportswear industries were able to produce quality goods and transport there product to the available market locally and internationally because of new technology brought by globalization. Australian designers have influence the world market in term on what the world will wear because of their creative designs and innovative fashion which brings higher demand internationally, Australia designs are exported many different countries in the world through international market. Australian designers produce top quality fashion at competitive prices and are able to compete successfully, many of which are significant international labels. Local designers are well established within the industry and are up-to-date with the latest trends based on those developed in the U.S. and Europe, as well as those unique to Australia. Jeans industries are doing well in the global market. Jeans outperformed the wider market because they are one of the cloths wear in different occasions. Jeans are staple cloths for Western consumers who wear them on a variety of occasions, some wear at work while others on social occasions. Recently the demand for jeans have increase because they are no longer considering jeans as casual wear bur as a luxury brand. Governments have introduced new policies intending to encourage Internationalization, to support technologically advanced textiles production and to sustain local. As a result of globalization most of jeans and sportswear sold in Australian market originate from China. In the other hand these sportswear industries has been criticized for the use of sweat shop since they violate the workers rights. There were some witnesses from some developing countries who volunteer to testify on how the working conditions look like in those industries. Australia sportswear industries use set up industries in poor nations to take the advantage of lower wage rates in those countries and get employees willing to work for lower wages, this has lead to emergence of anti globalization protestors who are opposing the sweatshops use by these industries. References Brian Galligan, Winsome Roberts, & Gabriella Trifiletti, 2001, Australians and globalization: the experience of two centuries, Cambridge: Cambridge University Press. Lord Callaghan, 1997, Opportunities and Risks of Globalization, interaction council, Washington, retrieved on 8/6/2011 from http://www.interactioncouncil.org/node/73. Alexander Downer, 2003, Australia Benefits from Globalization, Australian politics, Sydney, retrieved on 8/6/2011 from http://australianpolitics.com/news/2003/07/03-07-24.shtml. Martin Shanahan & Gerry Treuren, 2003, Globalization: Australian regional perspectives, London: Wakefield Press. National Library of Australia & APAIS., Australian Public Affairs Information Service, 1957, Australian public affairs information service, Melbourne: National Library Australia. Read More