The International Monetary Fund describes globalization as “the growing economic interdependence of countries worldwide through the increasing volume and variety of cross-border transactions in goods and services and of international capital flows, and also through the more rapid and widespread diffusion of technology.”
Globalization rests upon improved technologies that reduce transport and communication cost, as well as organization innovations, both of which expand the range of tradable goods and services. It is driven by the liberalization of trade and investment and deregulation of financial markets, and it is underpinned by a radical shift towards neo-classical economic policies.
A CHANGING GLOBAL ECONOMIC ENVIRONMENT
Productivity improvement has become even more important in the light of the changes that are happening in the economic business environment worldwide. The trend towards more deregulation and liberalization of trade and finance has accelerated the globalization of the economy. This has opened-up new markets and new opportunities for further business expansion. The liberalized trade regime gives more scope for direct participation in export and import activities while the globalization of manufacturing allow companies even in the developing countries to participate in international productions systems. On the other hand, globalization has increased the competition not only in the international market but also in the domestic markets. Products locally produced for the domestic market no face competition from the same priced or even lower priced imports.
International competition for jobs has also intensified. The freer movement of investment capital means that new job opportunities will be created in regions and countries that offer that most conducive economic and business environment. The mobility of business is further facilitated by the very rapid development of technology which allows smaller production units and factories using flexible productions operations. The globalization of manufacturing is acceleration. Products are now produced not just in one place but are assembled using components and parts produced in various places and countries all over the world. Even at domestic levels, the emerging production structure is that of networks of companies producing products through subcontracts and outsourcing of parts and services.
Consumers are getting increasingly sophisticated requiring more product differentiation and faster responses to their rapidly changing demands. Global marketing and advertising make the spread and shifts of fashions and fads very fast. There is also the heightened awareness of the need to take care of ecological concerns. Environmental friendliness of products and of the processes to produce them are getting important issues in international trade.
New forms of work organizations which are -in various degrees- flexible and more adaptable, less hierarchical, multi-skilled, constantly learning and self-managed are becoming one of the major sources of competitive advantage of enterprises. Organization are becoming more knowledge-based making human resource the key asset and determinant of enterprise competitiveness.
At the same time that all these changes are taking place, the world is experiencing a very high level of unemployment. Long term unemployment and underemployment are the phenomena observed not only in developing countries but are now the realities even in most developed countries. For a country or an enterprise to be really competitive in the long run, total productivity improvement through product and process innovations, better work organizations, total quality orientation and improved human resource quality is essential.
In summary therefore, the stake of workers in improving productivity are becoming even higher with all these changes happening in the global business. The availability of quality job opportunities will be determined by the country’s competitiveness in attracting new investments and know-how and in the ability of its products and services to compete in the international markets. The quality of jobs will be determined by the enterprises’ capacity to produce products and services requiring higher skills and competencies and on the enterprises’ ability to adopt internationally accepted good working practices and environment. The economic growth resulting from increased productivity enables a country better afford improved social services and protection.
One must not forget thought that workers are not just passive stakeholders in globalization. Through their actions, individually and collectively they can influence the factors that determine the conditions conducive to productivity improvement through programmes at national, sectoral and enterprise levels. They are in the best position to counter the temptation of low cost strategy which would lead to the deterioration of the quality employment through participation in concerted efforts to build the country’s enterprises ability to produce quality product at competitive cost while maintaining good employment.
This brings to the fore that new roles that trade union should play in the development of the worker in the global environment.
