The Interconnectedness between the American Economy and the World Economy
It is often said that when America sneezes, the entire world catches a cold. This is because of the high degree of integration between the American economy and other economies of the world. Ever since World War 2 ended, America became a dominant economic power. This led to increased integration between the American economy and […]
Vendor Managed Inventory (VMI) – A collaborative Supply Chain Concept
As the name suggests, VMI stands for Vendor Managed Inventory. VMI involves a collaborative and continuous inventory supply owned, managed and replenished by the Manufacturer right up to the last stocking point or point of sale to end customer. VMI concept is widely being used by companies both as procurement business model and FG supply […]
Integrated Product and Process Development – Meaning, Advantages and Key Factors
Introduction Objective of any organization is to provide customer satisfaction by building product and services, which not only satisfy needs and want but also create value for them. This requires product design based on the customer feedback and production process which not only minimizes cost but also provides a competitive advantage. However, most organizations tend […]
Why is Sweden Facing a Currency Crisis?
Sweden is not really a country that comes to find when one talks about finance or currency trading. The Swedish Krona is a relatively small and insignificant player in the global market. Trading in Swedish Krona accounts for less than 2% of the global currency trades. However, the Krona is what many call a counter […]
Socialism and Prosperity in the Nordic Countries
The United States Democratic Party has been praising the economic arrangement in Nordic nations for a very long time. Right from Bill Clinton to President Obama, they were all fans of the so-called Nordic socialism and wanted to introduce the model in America as well. The Democratic primaries were riddled with both Hillary Clinton as […]
Any business in order to function and grow needs an ecosystem of suppliers, vendors, and infrastructure that supports the operations of the business.
For instance, if a certain company wants to setup its operations in a particular place, it needs land, roads, water and power supply, and vendors and suppliers to supply its raw materials or other factors of production, and most importantly, provision of basic services to its employees in the form of transport, shopping avenues, and schools and hospitals. Hence, there needs to be an entire ecosystem that supports the business and its operations.
Likewise, international businesses too need services that support their operations and this includes quality housing and infrastructure for its employees including the expatriate ones. This means that if an international business has to setup shop in a particular country, it needs the existence of top quality infrastructure.
If we take the examples of India and China in this regard, they present a study in contrast. Whereas China built modern airports, roads, and other infrastructure, India is lagging behind in providing even the most basic facilities to the international businesses.
No wonder that foreign and western multinationals are more open to invest in China rather than in India. Moreover, the fact that India took its own time to construct international standard airports in its Metros barring Mumbai is a testament to the failure of the country to develop its basic infrastructure.
What is more appalling is that the roads and ports are also yet to be developed fully. On the other hand, the services including quality English education and other services are better in India than in China. Of course, this is not to say that India cannot develop its infrastructure but rather the fact that because of policy paralysis, political gridlock, and bad governance, it has not been able to ramp up significantly.
The implications of this are very clear. In order to attract foreign investment, countries must get their basic infrastructure right. The examples of the next Breakout Nations like Vietnam, Nigeria, and some countries in Latin America serves to illustrate the importance of getting the infrastructure sorted out.
Moreover, as the competition for foreign investment accelerates and intensifies, the winners are those who can provide the ecosystem of services better, faster, and smoother. This is the lesson that the stars of yesterday like Thailand, Indonesia, and Russia have learnt as their economies collapsed because of skewed investment priorities that put more money into the hands of a few rather than the collective.
Indeed, though the previous section criticized India for not improving its infrastructure, the fact that development has been more equitable than the other countries means that the societal services are more evenly balanced.
Finally, the fact that along with capital development, human development needs to be improved as well is clear from the examples of South Korea, Taiwan, and Malaysia. These Asian Tigers have shown that given the right mix of infrastructure and services to support international businesses, they can match the development of the western nations.
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Cross Border Mergers and Acquisitions and Some Recent Trends in this Field
February 12, 2025
