Through globalization trading activities between various economies has been boosted hence increasing productivity in those nations. Global markets have not only increased the revenue earned from the financial transactions carried out but also enhanced the quality and variety of goods and services produced. The improvement in quality is due to a desire to satisfy the international tastes and preferences. Global trade has improved the relationship between nations that have different ideologies and did not interact previously. The following paper is a case study of the bilateral trade between the United States and Vietnam. In the year 2000, the US opened trade relations with Vietnam regardless the fact that the two countries have different ideologies, with the US being a capitalist country and Vietnam being a communist. In the article, the benefits the two economies accrue from trading activities as a result of globalization will be discussed. Also, the paper will look at how the two economies manage their global business transactions.
Regardless the fact that Vietnam is a communist and conservative nation, there exist trade opportunities and activities in the area which have motivated the US government officials such as Rick Howath to invest in the locality. Production in Vietnam is associated with low costs due to resource availability and a broad market for final output since the consumers in the region are considered wealthy. Taking advantage of market economics’ unawareness of the Vietnam government, Intel’s general manager has negotiated with the officials in the area and set up a Semiconductor manufacturing plant in Saigon Hi-Tech Park along Hanoi highway in Vietnam. The creation of the plant known as A-9 has created employment opportunities in the region through employing locals to produce the chips which are meant to satisfy the extensive global market (Newspaper). Through this, both the Intel Company and the Vietnam government can benefit from the resource as partners. Intel through production from the plant makes adequate sales globally while the locals benefit from the income earned and developed infrastructure. The Intel Company can be able to monitor the fluctuations in the labor market since there is an adequate human resource supply in the region (Manning 136-157).
However, for the venture to be successful in the region, there is the need for proper research and evaluation of factors such as the political and cultural environment. Intel Co invested in researching on various variables in the region such as the education curriculum, the age of workforce in the area, the infrastructure and the traffic congestion in the location. Through the evaluation, the organization can make use of low-cost labor in the region such as skilled engineers from schools in Vietnam which lead to efficacy in production (Tran and Nørlund 143-163). The investigation helps the company to analyze the costs and benefits of the project which enabled the firm to make strategic decisions such as location and target population. Via the research, the project can cater for the needs of the locals such as infrastructure improvement and employment as well as meeting its primary objective of increasing its profitability.
Besides, globalization tends to enhance the control of politically unstable local governments by the international forums and bodies (Abbott and Tarp 1240006). Through this, the actions and operations in such states for instance corruption are checked. Before Intel invested $1b in the A-9 project agreement was made between the government and Intel to fight corruption which was rampant in the area. Government-owned Saigon Hi-Tech Park signed the pact with Intel Company to join hands in eradicating corruption in the region (Nguyen). Through the agreement, democratic and peaceful coexistence would be enhanced because all the people in the area are allocated equal rights and chances to arising opportunities.
Also, the project has benefited Vietnam a lot as evidenced by the interest the government has had on Intel’s managers through giving them direct access to high-ranking officials for efficient and faster transactions. There are signs of the expansion of the plant through the creation of government assembly lines which will have the effect of creating more jobs for the jobless youths in the region (Briefing). Intel is enhancing the efficiency of the plant through introducing its culture in the area for example executives working alongside the employees and enhancement of team-building activities such as Karaoke Fridays.
The Intel Company has efficiently globalized and impacted Vietnam in a positive way. The firm is appreciated by the locals with patriotism and pride due to its ability to identify the gaps in the local system and invest in them. Intel has invested in the needs of the local government such as jobs, illiteracy eradication, and improved infrastructure and by so doing the firm has boosted its productivity. The case of Intel’s venture in Vietnam is a perfect illustration of how globalization can be advantageous to the stakeholders.
Cited work
Tran, Angie Ngoc and Irene Nørlund. "Globalization, Industrialization, And Labor Markets In Vietnam". Journal of the Asia Pacific Economy 20.1 (2014): 143-163. Web.
Manning, Chris. "Globalization And Labour Markets In Boom And Crisis: The Case Of Vietnam". Asean Economic Bulletin 27.1 (2010): 136-157. Web.
Briefing, Vietnam. "Tech In Vietnam: Intel Increases Its Investment - Vietnam Briefing News". Vietnam Briefing News. N.p., 2015. Web. 24 Apr. 2016.
Newspaper, Tuoi. "80% Of World’S Computer Chips Will Be Made By Intel Vietnam By 2015: CEO". Tuoitrenews.vn. N.p., 2016. Web. 24 Apr. 2016.
Abbott, Philip and Finn Tarp. "GLOBALIZATION CRISES, TRADE AND DEVELOPMENT IN VIETNAM". J. Intl Econ. Comm. Policy. 03.01 (2012): 1240006. Web.
Nguyen, Binh. "Harmonization Of Law For Economic Development In Vietnam And Impacts Of The Us-Vietnam Bilateral Trade Agreement Toward This Process And Future US-VN Trade Relations: Part 3 Vietnam Doing Trade With US". SSRN Electronic Journal n. pag. Web.
