Some people think inviting large foreign companies to set up factories in developing countries is helpful for local economy while others think that the foreign companies should not be allowed to build their factories in developing countries, instead, local companies should be encouraged in order to develop local economy. Discuss both views and give your own opinion.
Global business has evolved into an inevitable trend in the era of globalization. With the growing competition between large foreign companies and local companies, a debate has been raised upon which one benefits the local economy more.
One view is in favor of factories being set up by large international corporations in developing countries. This gives significant impetus to local economic growth as it provides more job vacancies which boosts employment. Employees will enjoy the systemic management of the factory, where their specific skills are valued and assessed. They do not necessarily need to be multi-talented, while they still play a pivotal part in a particular role. Factories introduced in local areas also bring in advanced manufacturing techniques and innovative ideas. Training given to employees helps local people develop a global vision as well as harness their technical expertise. These well-trained personnel provide a quality workforce to develop the local economy.
An opposite view, however, argues that foreign companies should be forbidden to enter in developing countries while local companies should be encouraged. Admittedly, local companies are mainly founded and operated by local people, who have a better knowledge about the local situation with a greater motivation to develop their hometown. However, these local businesses in developing countries are majorly small private firms, many of which struggle for resources such as money and market. They may profit in their own sense but their contribution to the general economy may be minimal. Compared to those large enterprises, these small local companies employ less labor and are less competitive in a global market, due to which their impact on the whole economy is contentious.
In conclusion, I believe that allowing foreign companies to develop factories in developing countries is an effective way to promote local economy. They are expected to introduce cutting-edge manufactory and administrative ideas to local areas, where local firms can also benefit.
