Sources of Comparative Advantage
- Globalization has encouraged more trade between nations. In a globalized economy, countries and businesses are more connected than ever before. There is a greater flow of investment capital across international borders. Rapid and efficient transportation networks have enabled the shipment of goods and services across the globe in a cost effective way.
- Globalization is driven by market, economic, environmental and competitive factors. In the B2B market, economic factors include worldwide economies of scale in manufacturing and distribution, sourcing efficiencies, significant differences in a country’s costs and product development costs.
- For example, a single country market may not be large enough for a firm to realize economies of scale in production. By developing global products rather than national ones, product development costs can be greatly reduced. Cost advantages can also be secured by seeking suppliers for raw materials/components on a worldwide basis.
- Information technology (ICT) via the Internet enable businesses to share knowledge about products/services, pricing and production processes in real time. This enables both developed and developing economies to gain employment and capital investment and gain greater opportunities for increased output and economic development.
NEW YORK — April 5th 2022 — New York-based tech company NS1, a leader in smart network control solutions, is establishing a presence in Cork, Ireland as a major step to further the company’s global presence. The company is set to hire at least 30 computer engineers from various backgrounds and levels of expertise over the next two years.
- For example, the Apple iphone – the manufacturing process goes through different stages and assembled in different countries where each one adds value to the final product.