This paper presents a structured Q&A analysis of Thomas L. Friedman's 2012 New York Times editorial "Made in the World," examining key concepts in global economics. Topics covered include which domestic U.S. jobs are recovering, the evolving meaning of insourcing and outsourcing in an integrated global marketplace, definitions of imports and exports, the reliability of balance of trade as an economic indicator, and who benefits when foreign cars are made in the U.S. or American products are manufactured abroad. The paper also identifies industries most susceptible to global supply chain integration and evaluates whether Friedman's core argument about exports and American innovation holds up.
While much attention is paid to jobs that have left the United States, a number of domestic sectors have seen meaningful recovery. According to Rick Newman, there has been an increase in domestic jobs across 20 sectors, including: administration and support positions; employment services; healthcare; restaurants; retail; mining; religious and nonprofit groups; salespeople and customer service representatives; computer systems design; transit and ground transportation; hotels; federal government; management; performing arts and recreation; warehousing; oil and gas extraction; rail transportation; waste management; web portals and internet publishing; and management and technical consulting (Newman, 2012).
For most business people, insourcing and outsourcing have lost much of their meaning. In fact, sourcing — whether for materials or people — has become a global proposition. This is, in part, due to the expansion of the marketplace itself. Friedman pointed out that the customer base is truly global, so the idea of outsourcing has lost its relevance in that context. The world is now "so integrated that there is no 'out' and no 'in' anymore. In their businesses, every product and many services now are imagined, designed, marketed, and built through global supply chains that seek to access the best quality talent at the lowest cost, wherever it exists" (Friedman, 2012).
An import is an item manufactured outside of a country and brought into that country for sale or trade. An export is an item manufactured in a country but sold outside of it.
The balance of trade is "the difference between a country's imports and its exports. Balance of trade is the largest component of a country's balance of payments. Debit items include imports, foreign aid, domestic spending abroad, and domestic investments abroad. Credit items include exports, foreign spending in the domestic economy, and foreign investments in the domestic economy. A country has a trade deficit if it imports more than it exports; the opposite scenario is a trade surplus" (Investopedia, 2012).
The balance of trade is not necessarily a great measure of a country's overall economic strength. Generally, in recessions, countries prefer to export more than they import in order to create jobs. However, in strong economies, countries may want to import more, which increases price competition, limits inflation, and improves a country's ability to meet demand (Investopedia, 2012). Therefore, while the balance of trade can help describe a country's economic health, it is not solely descriptive of that health.
"Economic beneficiaries of foreign auto manufacturing domestically"
"Who gains when American goods are made and sold abroad"
"Technology sector's vulnerability to global supply chains"
"Evaluating Friedman's argument about exports and innovation"
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