Saturday, September 22

Some Rough Thoughts on Globalization, and the Most Likely Types of Businesses to Thrive in a Local Economy

In general, globalization presents a massive challenge to the health of local economies everywhere. If we could balance a global economy for high-value products with a local economy for basic needs/wants, that would be ideal. Unfortunately, global companies dominate both high-value products (think Apple and Honda) AND basic needs/wants (think Wal-Mart and Home Depot). This strips the teeth out of local economy--local businesses that are actually manageable by 'normal folks' like grocery and hardware stores cannot compete with the behemoths. Not everyone has the expertise and education to create a global company, but in every town there are at least a few people who can run a grocery or hardware store.

Yay, global Apple and Honda. Boo, global Wal-Mart and Home Depot.

4 comments:

  1. Anonymous12:21 PM

    Yay Wal Mart?
    http://web.mit.edu/newsoffice/2006/iap-walmart.html

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  2. Lower prices...BUT it takes away the ability for local entrepreneurs to provide those same goods/services, which keep the wealth in the local economy.

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  3. Anonymous2:06 PM

    I have to object to your terms. Take away the ability - no ability was taken away. People are free to patronize the locally based merchants if they want to. Price is just one point of competition.
    Also, the folks who save money on the items at a WalMart are free to spend it on other locally based goods and services, ones that truly can't be improved by people far away.

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  4. Change "takes away the ability for" to "creates a near-insurmountable competitive challenge for". You second paragraph is a good point, but the problem goes back to my original statement: Not everyone has the expertise and education to create a global company (with high value-add products), but in every town there are at least a few people who can run a grocery or hardware store. So Wal-Mart & Home Depot (etc.) dislocate what could be a viable, healthy part of the local economy. All that's left are 'local specialties'--and in many small towns those are pretty slim pickings.

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