Globalization

1
Globalization

• Challenges and Opportunities

2
Student Expectations

• Understand the concept of globalization
• Recognize factors that have led to the current
  era of globalization
• Identify the benefits and drawbacks of
  globalization
• Recognize evidence of globalization in your area
  (in our case, central Maine)

3
Landmarks In Globalization

• European expansion of capitalism in the 16th
  century, following the first circumnavigation of
  the earth in 1519 to 1521.
• Establishment of the International Date Line and
  world time zones, near global adoption of the
  Gregorian calendar, international standards
  agreed upon for telegraphy and signaling all
  between 1875 and 1925
• ? World trade and investment expansion in the
  late nineteenth century halted by the First World
  War and anti-free trade protectionism that led to
  the Great Depression in 1930. This period
  interrupts the process of the previous era of
  globalization.

4
Landmarks In Globalization (Contd)

• WWII leads to another expansion of capitalism
  through the development of multinational
  companies interested in producing and selling in
  the domestic markets of nations around the world
  the emancipation of colonies created a new world
  order the increase in air travel and the
  development of international communications which
  enhance the international reach of business.
• ? Current era Fall of the Berlin Wall and the
  collapse of the Soviet Union ends the Cold War.
  Capitalism triumphant over socialism. Development
  of the internet facilitates organization of
  business on a global scale.

5
Essential Questions

• What are the current strengths and weaknesses of
  the Maine economy?
• How has globalization impacted business and
  employment in Maine?
• How can Maine position itself to move forward in
  a globalized world?

6
Economic Profile - Weaknesses

• Rural state
• Sparse population
• Little diversity
• Geographic dead end
• Small business oriented economy
• Limited corporate impact
• High tax rate
• Elderly population (3rd oldest)
• Highly regulated environment and economy
• High workers comp., fringes, and labor costs
• Not considered business friendly
• Health care problem

• 3 distinct regions
• Southern-Coastal York, Cumberland counties and
  coastal region to Bath-Brunswick high
  employment, high income, real estate comparable
  to greater Boston and Southern NH
• Central Lewiston to Bangor along the 95
  corridor slightly lower in all areas
• Rim Sparsely populated region removed
  geographically from the 95 corridor
  underemployment and unemployment high income and
  property values low

7
Economic Profile - Strengths

• Since 2002, exports have increased 20
• 8th in the nation in export growth
• 24b in goods to 164 countries in 2004
• London-based Foreign Investment Magazine rated
  Maines quality of life as the best in the nation
• Ranked 10th in FDI (in percentage of total
  business investment)
• Ranked 3rd in the nation in information
  technology and telecoms
• 95.4 high school graduation rate (1 in the
  nation)
• A natural playground
• Low crime
• Traditionally strong work ethic reputation

8
Three Regions
9
Population Stats
10
Job Change
11
Unemployment
12
Manufacturing Employment
13
Retail Sales
14

• Surplus and Salvage retail
• We sell anything we dont have to feed
• Family-owned and run
• 55th largest retail store in the country
• Biggest suppliers? Wal-Mart and Sams Club
• Wal-Marts biggest competitor in Maine
• Huge business for Maine, mediumsmall sized
  business globally
• 400 employees nine years ago 1000 employees
  today

15
Mardens Global Connection
16
Mardens Trends

• Innovative business strategy
• Very different from big box stores like WalMart
• Offers most of the same advantages
• Taking full advantage of the benefits of
  globalization
• Wages have gone down in the past 9 years

17

• LL Bean opened their 1st international store in
  Toyko, 1992. They now have ten stores in Japan
  and a local website in Japanese.
• In 2004 60 versions of LL Bean catalog were sent
  to all 50 states and more than 140 countries
• In 2004, LL Bean received over 14 million phone
  calls
• LLBean.com was launched in 1995 - now over 56,000
  orders are placed online each day
• LL Bean is not a publicly traded company

18
Madison Paper Madison, Maine

• Headquarters Finland
• Why in Maine?
• Still profitable
• Stable workforce
• Great labor relations
• Two unions
• Production Incentive Plan
• Global
• Madison Mill is first out of Finland, but now
  others are coming.
• When networks, flies employees to meet
  face-to-face.
• Shares technology with other paper companies and
  organizations
• Sells abroad
• Social and Corporate Social Responsibility
• Sustainability Policy

19

• The people of Madison understand value to
  community and region.
• Madison Paper pays 61 of property taxes in the
  Town of Madison. They realize that the company
  provides one of the few opportunities for local
  wood producers to sell their four-foot wood at
  competitive prices. And, they appreciate that
  Madison Paper Industries impact on the area is
  significant.
• 60 owned by Myllykoski, 40 by The New York
  Times
• Time and Newsweek used to get their paper in
  Maine but in early nineties went overseas.
• Maine paper also affected by Internet and
  Technology? less demand

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21

• Mail-order seed producer and merchant located in
  Albion and Winslow, ME
• Serves commercial growers and home gardeners
• Most of Johnnys seeds grown in rural China
• Chinese seed growers hired for Johnnys by Dutch
  firm
• Lower cost seeds have increased national sales

22

• Worlds largest golf tee manufacturing company -
  Burnham, ME
• Quality golf tees made of white birch
• Business is very good - Bev Swanson, C.F.O.
• Pride dominates the high end tee market and
  professional golf tours
• Pride softspikes manufactured in England
• Low end tee market dominated by China
• Pride employee speaks Mandarin
• Pride expanding to China soon
• Wisconsin plant closed, major operations solely
  in Maine

23

• Founded 1996
• 282 dues-paying members (organizations and
  companies)
• Largest international trade organization in New
  England
• Organized trade missions to Quebec, France, and,
  most recently, Cuba
• Provide technical assistance and trade
  counseling, import and export leads,
  international credit reports, workshops,
  coordinated trade missions, and trade shows
• Offers global exposure to Maines small- and
  medium-sized businesses
• Mission To promote the expansion of Maines
  economy through increased international trade in
  goods and services and related industries

24

• Private, non-profit corporation that provides
  free site-selection assistance to out-of-state
  companies
• Services include retail site searches, data
  collection and analysis, incentives
  identification and valuation, and site visit
  coordination
• Active in bringing T-Mobile to the Waterville area

25
Meeting the Globalization Challenge

• Challenges
• 3rd world work force?
• Brain drain
• Health care crisis looming
• Relocating businesses to Maine
• Decline in manufacturing

26
Meeting the Globalization Challenge, part 2

• Positive Trends
• Promoting quality of life theme
• Devoting more resources to tourism
• Developing greater international contacts
• Expanding exporting capacity
• Extending broadband capability
• Using Pine Tree Zones to attract new businesses
• Transparency in incentive packages

27
Meeting the Globalization Challenge, Part 3

• Recommendations
• Form public-private partnerships in policy
  development
• Focus on quality, not just quantity, of jobs
  (income growth rather than job creation)
• Develop skilled workforce, retrain incumbents
• Incentivize according to long-term goals
• Promote science and technology in education
• Devote greater investment to transportation and
  technical infrastructure
• Develop comprehensive tourism program
• Assist rural-based enterprises in Maines Rim area