With the increase in operational cost from first world countries, many manufacturers shift production and operations to third world countries. This article discusses not only how the shifting of operations affected quality, employment rates but also how it made an impact in the struggle for power.
Everything around us is 80% not authentically made from the place where we bought it. I bought a t-shirt while visiting Singapore’s Night Safari and it was very expensive but I was happy since it was glow in the dark and have Singapore written on the front. When I went home, I ask our house cleaner to wash it carefully because it is imported; she told me that it was from China. Clearly, I was devastated. It was not because it was from china, but the fact that I could have save money buying it here than there. These spark my curiosity in finding out how far the contribution of third world countries affects the global market.
Many manufacturer like Nike, have opened up factories in third world countries as inflation rates, soaring operational cost affecting the company’s cash overflow, and with sales not performing above standard, they have to switch to low labor cost to remain competitive in the market. I shop hand tools to equip my garage and saw how a Zyklop, a German brand ratchet sets, came from a company in Taiwan and Mainland China. Although there is one made from Germany, but it cost more unlike the other sets that come from Taiwan and China. Having to decide which ratchet sets to buy is clearly confusing.
We have often stereotype products made from Third World countries as cheap, low class and not desirable. A ratchet sets that easily breaks points to the low quality production line from the place that produced it. Although, this is true in the first few years of transitional period, third world countries have perfect the craft and even come up with ways in improving the products and moving it up the next level.
Many workers, who were smart, put up their own factories, produce quality ratchet wrench, and even become supplier wrench to major stores like Sear and around the world. Evidently, the First world companies never anticipated that third world countries would develop in such a short a time. What is happening in the ratchet sets industry is also happening to other industries.
Clearly, the cushion bubble burst unexpectedly to ugly reality. Third world countries like China, South Korea, Taiwan and India have evolve in such a short span of time that it seems like the plug is suddenly pulled out from the palm of the provider. These Third world countries now command and share the power controlled by few countries in the past. From the G7, global power, a new set of global power now exist and called the G20.
The shifting of power enabled new power to rise and the monopolization of demand and supply of the market of the few is now under more scrutiny. Although this is ideal and would be good for the economy, political tensions and demands also rises with each country demanding more and more and some withheld crucial resources if their demands are not met. Evidently, the control of the world is based on the strength of the market, if you can voice out your demands, then you hold the power.