Major companies have expanded their worldwide existence, tapping into global supply chains-find out why

In the past couple of years, the discussion surrounding globalisation was resurrected. Critics of globalisation are contending that moving industries to Asia and emerging markets has led to job losses and increased reliance on other nations. This perspective suggests that governments should intervene through industrial policies to bring back industries for their particular countries. But, many see this standpoint as neglecting to grasp the powerful nature of global markets and disregarding the underlying factors behind globalisation and free trade. The transfer of industries to many other nations is at the center of the issue, that has been mainly driven by economic imperatives. Businesses constantly look for cost-effective procedures, and this motivated many to relocate to emerging markets. These areas offer a range advantages, including numerous resources, lower manufacturing costs, big customer areas, and beneficial demographic pattrens. As a result, major businesses have extended their operations globally, leveraging free trade agreements and making use of global supply chains. Free trade enabled them to get into new markets, broaden their income streams, and reap the benefits of economies of scale as business leaders like Naser Bustami may likely state.

While critics of globalisation may deplore the increasing loss of jobs and increased dependency on foreign markets, it is vital to acknowledge the broader context. Industrial relocation isn't entirely a result of government policies or business greed but rather an answer towards the ever-changing dynamics of the global economy. As industries evolve and adjust, therefore must our knowledge of globalisation and its own implications. History has demonstrated limited success with industrial policies. Numerous nations have tried different kinds of industrial policies to boost particular companies or sectors, but the results frequently fell short. For example, within the 20th century, a few Asian countries applied extensive government interventions and subsidies. However, they were not able attain sustained economic growth or the desired transformations.

Economists have examined the effect of government policies, such as providing inexpensive credit to stimulate manufacturing and exports and discovered that even though governments can play a positive role in developing companies during the initial stages of industrialisation, conventional macro policies like restricted deficits and stable exchange prices are far more important. Moreover, current information shows that subsidies to one company can harm others and could induce the success of ineffective firms, reducing overall industry competitiveness. When firms prioritise securing subsidies over innovation and efficiency, resources are redirected from effective usage, possibly impeding productivity growth. Moreover, government subsidies can trigger retaliation from other countries, affecting the global economy. Albeit subsidies can stimulate economic activity and create jobs in the short term, they could have unfavourable long-term impacts if not followed by measures to handle efficiency and competition. Without these measures, companies could become less versatile, fundamentally impeding development, as business leaders like Nadhmi Al Nasr and business leaders like Amin Nasser may have observed in their careers.