Sample Essay

Cost globalization drivers refer to all the factors that affect economics of industries like global economies of scale, favorable logistics, fast changing technology, sourcing efficiencies, difference in exchange rates and steep experience curve to mention just a few.  As highlighted earlier, these factors affect an industry making it to go global in order to continue functioning and making profits.  For instance, high products development costs forces a company to go global especially when the costs cannot be paid by domestic markets. Currently, the fast changing technology also increases the costs of production. As a result, industries which use the current technology are forced to focus more on global markets since such markets help in recovering cost of production easily while compared to domestic markets. In these situations, globalization continues to extend and flourish.

For example many textile industries have been forced to expand into the global market since the cost of labor is too high. This is because though there is a available unskilled labor, many unemployed people prefer not to be employed in the textile industry since the there is a slight difference between the net income while working in a textile firm and unemployment benefits is very low, hence a many preferring to remain unemployed. This makes the available labor force to cost very high hence forcing the textile industries to expand abroad.

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