Delocalization: Advantages, inconveniences and consequences

Résumé du document

Economic delocalization is a transfer of activities, of capital and of employment in areas of a country or of the world which have competitive advantages. Delocalization consists of separating fabrication areas and transformation products areas of consummation country. The production is delocalized in other countries and thus the phenomenon of delocalization offers employment to foreign people. That is why increase of unemployment in developed countries is explained by delocalization. Entrepreneurs produce where it is cheaper and sell where there is purchasing power. If the delocalization phenomenon is very old – companies began this movement in the 60s- it developed in the 90s thanks to the decrease of transport costs, the improvement of communication techniques and market globalization.

Extraits

[...] Work flexibility In some countries, we can find workers' timetables more adapted and flexible. Thus, workers are more available for companies to produce some products more quickly. For example, Thailand offers some flexibility of work. The work time is 8 hours a day and 48 hours a week. The minimum of rest is fixed to one day, in general, Sunday. It is one of the huge benefits for companies. Way to avoid ecological and law constraints Companies delocalize this production because of constraints which have in its origin countries. [...]

[...] In some countries, companies use children to work. For example, in 2007, an investigation has done by The Observer - an English newspaper - it has shown that children worked in India to do confection of clothes for Gap. The children didn't have any income, worked in bad conditions and were victims of corporal punitions. The company published an article to declare her ignorance. Indeed, the director said that he didn't know these elements. It wasn't the first time that the company Gap had problems with accusations of children work and it isn't the only company that takes advantage of children's work in countries where doesn't exist legislation. [...]

[...] Indeed, companies, above all European companies, come back to quality and no quantity. Thus, we note a development of relocalization. Definition Relocalization corresponds to production's coming back to home country. Companies stop to produce in host countries and choose to develop networks in home country. Usually, relocalizations are provoked by: - Imperfection problems with the final product - Important companies' change to concentrate production in origin markets in a logic of rationalization. - Economical arguments There are four factors which determinate relocalization: - Diffusion of new technologies and product innovations in home country - Organizational innovations - Demand incertitude - Coming back to quality values To illustrate the system of relocalization it seems interesting to take an example. [...]

[...] Delocalization is a difficult notion and we can't really measure its importance. Now, the delocalization phenomenon affects as much industrial sector as services sector. As we saw in the definition, the choice of delocalization isn't lead only by cheaper productive costs. Companies decide to delocalize for structural factors like politic situation, workers qualification or the quality of transports networks. Now, we can ask what the consequences of such delocalization out of national territory are. We will see that delocalization can provoke positive consequences for companies and consumers but it can have harmful effects for the economy. [...]

[...] Tariff-jumping: If a firm wants to sell in another country, sometimes there are trade barriers called tariff jumping. Raw materials: A raw material is something that is acted upon or used by organisms, or by human labor or industry, for use as a building material to create some product or structure. Know-how (conservation): intellectual property that industry want to protect VIII. References Internet sites - Wikipedia for definitions of delocalization and relocalization - http://tpethailande.free.fr/delocaliser.html which is a site concerning delocalization in Thailand - http://www.delporte.org/travaux/deloc.htm which is a French site about European delocalization. [...]