Small Business and Globalization
The world's economy has become increasingly global in recent years, and the impact of globalization on small businesses has been huge. In the past, international business was, for the most part, restricted to large corporations with strong financial resources. Often international business was not conducted directly, but with the aid of an intermediary, usually a global trading company.
Advances in technology and education opened new avenues for globalization:
-
The invention of fax machines eliminated the need for expensive telex machines and trained operators.
-
During the 1980s, the educational system evolved to include programs in international business at many universities and even community colleges. This resulted in a large number of graduates prepared to do business on a global scale.
-
The rise of the Internet created a means for instant worldwide communication and has made it possible for even small organizations to conduct business directly almost anywhere in the world.
Definition of Globalization
What is globalization? Globalization is defined as the process of individual national economies becoming increasingly integrated over time. The term was coined in the 1980s when it became easier to conduct international business because of advances in computer technology. On another level, globalization also refers to the expansion of individual business into new countries worldwide.
Advantages of Globalization
Globalization has had a huge effect on economies around the world, creating many positive changes, including:
- the availability of affordable goods to consumers in Western nations
- the creation of millions of jobs around the world, strengthening economies
- the removal of corrupt dictators from power, as a result of providing information to once-isolated countries
- a boost to the economy of poor countries from richer nations through bond investments, commercial loans and equity.
Small Business and Globalization
Individual small businesses can benefit from globalization by increasing their customer base, moving beyond saturated domestic markets and lowering costs for labor and materials.
Outsourcing is a growing trend in globalization. The instant communication of the Internet makes it possible to hire employees from around the country or around the globe. Here are some benefits of outsourcing for small business:
- flexible working environment for management and employees
- freer cash flow
- larger pool of skilled potential employees
- less expensive labor
- more effective use of staff.
Sadly, some domestic jobs are inevitably lost to outsourcing. The overall benefit to a company however, may preserve remaining jobs at home in the long run.
Small Business Tips
If you are thinking of expanding your small business into international markets, here are some tips to help you get started:
- Be sure to learn about the culture, etiquette, exchange rates, tariffs and trade regulations of any country where you plan to do business.
- Check the background of potential international business associates to insure qualifications and honesty.
- Consider a joint venture partnership with a native of a target country to benefit from insider knowledge of customs and business practices.
- Establish a global presence by listing your business in international web directories and yellow pages.
- Find a bank equipped to handle foreign currency and international business.
- Find a translation service that can help you with communication, as well as translate your documents and business cards into the necessary language.
About Us