In the world economy today, we can see many changes from how the world use to be. People from all different places have integrated into a society where their cultures and values are welcomed no matter where the come from. This assignment will identify four factors that determined the modern world economy, describe the shifts over the past 30 years with examples, and discuss the implications in Britain, North America, and Hong Kong. In addition the current economy in Mexico will be introduced. Analysis: The four factors that determined current modern economy are land, labor, energy, and capital. These are also the four factors of production. ” (Hill, 2011) Over the last 30 years, national economies shifted far from what they use to be. National economies use to be relatively self-contained entities, isolated by barriers to trade and investment, with differences in government regulation, culture, and business systems. Now it has shifted toward a world where barriers to trade and investment are declining, cultures are converging, and national economies are merging into an integrated, interdependent global economic system. Today, there are more than $3 trillion dollars in foreign exchange transactions taking place everyday as well as over $12 million dollars of goods and $3 trillion dollars worth of being sold across the boarders. ” (Hill, 2011) Places like the United States use to be the dominant country but now because China and Japan are becoming so successful, The dominance of the United States has diminished. These shifts manifest themselves in the world economy in many ways. For example, he now have international institutions.
People can actually attend school in a different country and with the technology nowadays, they can do it online. Other examples of the shift includes “ what people wear, the car people drive, the food people eat, and the jobs where people work. ” (Hill, 2011) You can see that fashion is all over the world and so is McDonalds. You can buy almost anything you want from anywhere in the world online. “ Transactions occur on computers with foreign exchange dealers. ” (PBS, 2009) Everyone is really merging together and being from different places is not that big a deal.
Its easier to come together and share different tastes and cultures are easily accepted. While all these changes seem to make life better for everyone, most people experience certain implications. Britain’s investment opportunities were mainly based in America and Europe. Now with the evolving global world, British firms need to look beyond Europe and America for investment and opportunities. In developing countries, consumer spending power is growing very quickly and it would benefit the British firms if they would look into the developing countries as well.
Because the Chinese and Japanese are becoming so successful, they are attracted to successful countries like Britain to help them get their businesses off of the ground. This can be an opportunity as well as a threat for Britain. The implications for North America are similar to the implications for Great Britain. However, North America is also focused on increasing prosperity in Latin America. The implications of Hong Kong is that it is the gateway to the immense market of mainland China. “ Firms are no longer taken for granted and access to China is improving along with the move towards a market economy within China. (Hill, 2011) The country that I am going to study is Mexico. To keep Mexico afloat, trade missions are being instituted there. “ Trade missions are usually organized by government officials and give businesses the chance to learn about resources available in different sectors of the economy. ” (Trade Missions, 2012) Between 1980 and 2000, state owned enterprises declined, Hopefully these trade missions can help Mexicos economy progress. Conclusion: International businesses are facing new opportunities and threats everyday. These shifts have brought the world closer together and everyone now can learn more from people all over the world.
Although there happen to be implications for many countries, they allow firms to think outside the box and try new things because at the end of the day, we all depend on each other. Bibliography: Hill, C. W. (2008) Global Business Today 6th Ed. : McGraw Hill Mexico Today (2012) Trade Missions to Mexico City and Villahermosa, Mexico. Retrieved March 3, 2012 from mexicotoday. com/.. /mosaic PBS. 2008. The Ascent of Money Introduction by Niall Furguson. Retrieved March 3, 2012 from, www. pbs. org/wnet/ascentofmoney/featured/watch-full-program-the-ascent-of- money/24/