Globalization and Technological Revolution Term Paper

Globalization and Technological Revolution - Term Paper Example Organizations in the international arena typically follow low cost, low-risk entry strategies. Apart from low-risk organizations always consider the political, legal and economic factors of national environments. Accordingly, the competition for FDI would be based increasingly on cost differences between locations, the quality of infrastructure and business-related services, the ease of doing business, and the availability of skills. Organizations are attracted to FDI when they offered a competitive advantage over locals, a lower cost for labor and/or physical resources, secure access to physical resources, proximity to major markets and increased market share, Countries attract FDI if they provide certain facilities to organizations. In this regard, UNCTAD (2002) developed a 12 point criteria, named the inward FDI potential index capture several factors apart from market size (Appendix -1). Now we will analyze the case study- Ireland 2004. Starting with the concept of GDP as it refl ects the income of the people within the country; it also shows the capacity especially purchasing power of the people; it also reflects the demand for the commodities and services. As provided in the case study, the GDP per head (US$: market exchange rate) Ireland in 2003 is $ 37,911 and GDP per head (US$: Purchasing power parity) is 32, 916. Even the real GDP growth rate during 1999-2003 stood around 7.1%. Irish GDP grew at 9.9% per annum during the period 1996-2000. But the GDP growth has slowed down during 2003 due to weak global demand and several other factors. Now if we analyze Irish real GDP growth with most of the countries in Europe, US or Japan we find that GDP growth rate is much higher in Ireland in comparison to UK, France, Germany, US or Japan. So it shows that Ireland economy is expanding and the income level of people are going up which may result in an increase in demand. So companies have enough opportunities to invest in Ireland. The rate of growth of GPD over th e last 5 years when the reforms actually started is around 7-8% which could be seen as a remarkable growth rate if we compare it with other countries in the vicinity.