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More than just a good vacuum... |
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Written by Richard Howard
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Monday, 05 February 2007 |
As an article in this week's Economist shows, James Dyson does not just provide the world with colourful vacuum cleaners, he has also provided a fantastic example of the benefits of globalisation in action. Dyson vacuums were originally made in Wiltshire but production was shifted to Malaysia at the turn of the century. This allowed Dyson to be within a ten mile radius of all suppliers, with a bigger factory (he now has 3) and a cheaper workforce, at one-third the price of his British one. All this has led to a four-fold rise in the number of vacuum cleaners being made.
However, this is not a sad story of British manufacturing jobs lost to a cheaper workforce, with the unlucky Brit left standing in the dole queue. The Wiltshire plant has now been turned into a research and development centre, which employs more people now than in its manufacturing days and in higher skilled and better paid jobs. This is a prime example of how globalisation can benefit both developed and developing countries. With historical links still in place, Britain is in pole position to take advantage of the outsourcing of low skilled jobs in order to create better paid, higher skilled jobs at home.
However, for globalisation to work effectively, many developing nations still need to do more . The Economist points out that even in India, "Infrastructure, such as roads and power, and public services, such as education and drinking water, are woefully inadequate and limit growth." If developing nations are going to ride the globalisation wave successfully and turn it into prolonged economic success, these issues need to be addressed. Developing countries, such as India and Malaysia, need to press ahead with market reforms and investment, particularly in education. After all, what's the point of a company building shiny new offices in Delhi, if there are not enough educated people to work in it?
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