Tuesday, July 19, 2005

Localization versus globalization

Great quote from Robert J. Samuelson.

"Localization usually trumps globalization, though countries seem to succeed more when they encourage globalization. ":

Localization usually wins, time and time again you see local players beating multinationals. Usually when MNCs win, is when they bought the local firm, kept most of its local operations and transfered their best practices.

However, the benefits of increasing productivity because of globalization are still solid:

1. Shaking sleepy incumbents
2. Transfering international best practices
3. Checking local monopolies abuses
4. Specializing in sector with comparative and competitive advantages

For example, Mexico still suffers from companies protected from international competition. Monopolies like Cemex and Telmex, and state-owned electric companies stop critical infraestracture industries.

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