What role do Central and Eastern Europe play?
The process of Global expansion and production relocation has experienced significant growth since the 1980s. The rise of globalization can be attributed to several factors, one of which is the integration of Central and Eastern European as well as Asian countries into the global economy.
The integration of Central and Eastern European countries has introduced new players and competitors into world trade. The population involved in global trade almost quadrupled between 1975 and 2000 as a result of this integration.
We will examine the factors that influence the increase in internationalization and global production and explore the role that the countries of Central and Eastern Europe play in this process.
What are the factors that influence ongoing Global expansion and global production?
Global expansion and the relocation of production abroad have gone through various stages over the years. In previous decades, globalization was driven primarily by exports. After 1980, and especially in the 1990s, additional factors emerged that further encouraged internationalization and global production.
Initially, the introduction of tools such as assembly lines made it possible to achieve economies of scale. However, production was initially limited to domestic markets. After the Second World War, international trade began to expand, and territorial barriers were gradually dismantled. As a result, more and more foreign locations were used for the distribution of production.
This happened as a result of several rounds of tariff reductions under the General Agreement on Tariffs and Trade. The progressive integration of the EU into a common market was also a factor that contributed to the abolition of territorial barriers and, of course, to the facilitation of internationalization.
Technological progress is another key factor in the process of internationalization. Improved technological capabilities and infrastructure have opened up opportunities for multinational companies in locations that were previously inaccessible.
Transportation, trade, and communication are evolving. As a result, companies are tapping into new markets and expanding their activities worldwide. This leads to the networking of multiple companies and opens doors for direct investment, a factor of enormous importance for globalization.
What role do Central and Eastern Europe play as a factor in global expansion?
In addition, Central and Eastern European countries have a skilled workforce that works at lower labor costs. This makes these countries particularly attractive for foreign investment and offshoring. Their appeal is further enhanced by the ongoing expansion of infrastructure.
In addition, Central and Eastern European countries have a skilled workforce that works at lower labor costs. This makes these countries particularly attractive for foreign investment and offshoring. The attractiveness of Central and Eastern European countries for foreign investment is also increasing due to the expansion of infrastructure.
In 2004, German companies made direct investments in approximately 2,700 companies across the 10 CEE countries. These companies employed 757,000 people and generated sales of nearly 108 billion euros. Investments in the 10 CEE countries have grown disproportionately over the last decade, resulting in an increased influence of these countries on the global market.
Conclusion
Investment activity in the ten CEE countries has increased significantly, making them important players in the global economy. This is a crucial factor for global production. Foreign investment from various regions plays a key role in the growth of the CEE countries.
The Central and Eastern European countries, in particular PolandHungary, the Czech republic and Slovakia, are attracting significant foreign investment from investors such as Germany, Austria and the USA. This contributes to the region's overall growth and has an impact on the global economy.
According to calculations, around 120,000 jobs were relocated from Germany to the CEE 10 countries by the end of 2004 in order to save costs.