Selective in exports, Microeconomics

Selective in Exports:

There are many industries where India has an advantage because of relatively lower costs of all forms of manpower whether it is professional or factory labour. However, while this can give an initial advantage, it should not be taken for an enduring advantage due to the following reasons. One, as products become more sophisticated, labour as  a cost factor becomes less and less important. Two, the differences in costs are narrowed down through higher level of automation.  Three, in processes that require large number of cheap labour, the industry is bound to shift its operation along the line of the ever-declining scale of poorer countries. So a poorer country than India can eventually overtake us with yet cheaper labour. Therefore, when one has established an export market on the basis of cheaper manpower, one has to be vigilant to make sure that one builds up other advantages to compensate for the inevitable loss of this temporary advantage. 

In view of the above, we should concentrate our attention and resources on those areas where we have comparative marketing advantage instead of the traditional comparative production cost advantage. In this connection, it may further be added that although it may pay to concentrate on 'extreme focus areas', it would be more rewarding to identify the countries with low "trade intensity".

 

Posted Date: 11/15/2012 12:37:43 AM | Location : United States







Related Discussions:- Selective in exports, Assignment Help, Ask Question on Selective in exports, Get Answer, Expert's Help, Selective in exports Discussions

Write discussion on Selective in exports
Your posts are moderated
Related Questions
Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4

what is a perfect competition and how does it differ from monopoly?

On Valentine's Day, the price of roses increases by more than the price of greeting cards.  Why? (Hint: Consider what makes roses and cards different and how that difference might

Due Diligence The investigative procedure an investor should conduct into the operations and business strategy assumptions of an organization soliciting investors.

-1- ASSIGNMENT #1 The demand function for Product X is given by: Qdx = 80- 2Px- 0.05P²x -0.2Py + 4Pz + 0.01I+ 2A Where: Px Price of good X $120.00 Py Price of related good y $100.0

Ask qExplain why each of the following factors may influence the own price elasticity of demand for a commodity. (i) Consumer preferences, that is, whether consumers regard the com

Time is a significant determinant of price elasticity.  If a price changes, it might take consumers a certain amount of time to discover alternative lifestyles or commodities to ac

use a graphical illustration to describe briefly what the influence of each of the following be on the market supply of labour,(a) an increase in immigrants, (b) a reduction in wag

How does the BLS classify people who are "not in the labor force," and what people are often in this category?  If an individual surveyed (that is, who is age 16 or over and no

Q. What is Monetarism? Monetarism:Monetarism was a right-wing economic theory (associated with work of Milton Friedman, in particular) which believed that inflation could be co