With the spread of globalization over the past few decades, it has become easier for large-scale companies to branch out to foreign countries, turning over significant amounts of money. This development, however, according to some, should be deemed as negative, due to threats they pose to local businesses. While I acknowledge the demerits of international companies, I believe that their impact should be seen as a change for the better.
The primary argument against international corporations is that they push many local businesses towards bankruptcy. The success of a business is determined by its financial health, since it can invest in research and development, marketing and many other key areas to improve its reputation. Small local companies, however, in most cases barely make ends meet, functioning on small to no profit margins, which leaves them at a relative disadvantage. For example, when a world-famous fast food brand KFC started its operations in my country, Uzbekistan, several years ago, many local fast food outlets couldn’t compete, thus leaving the market. Such cases clearly highlight the negative impact of big companies on local ones, potentially leading to unemployment and financial losses to business owners.
Nevertheless, I am of the view that the development of multinational businesses should be seen as progress for two major benefits. One is their contribution to employment, meaning that their scale requires a large number of staff members. Although they might be the driving forces behind the failure of a few businesses, they can compensate for it by employing significantly more people, in some cases being leading employers in host countries. A vivid example would be the arrival of major clothing companies, including Adidas and Nike, to Bangladesh, boosting the share of manufacturing to second largest after agriculture in the country and reducing poverty levels.
Moreover, the growth of such businesses boosts the economy beyond employment benefits. In financial terms, they pay huge amounts of tax to the government due to their scale. This, in turn, means that the more international companies a country welcomes, the more financial resources it receives. This money can be spent on vital areas like infrastructure, education and healthcare, particularly in countries that don’t have the means to do so.
In conclusion, the rise of multinational companies can admittedly pose challenges to local businesses. Despite these, my own conviction is that they should be regarded as a positive development for their contribution to employment and economy as a whole. Therefore, I believe that countries, especially developing and underdeveloped ones, ought to see them as opportunities to reduce unemployment, improve the economy and hence achieve prosperity.