Negative Effects of Globalization on Small Businesses

In this technology built global economy we live in today globalization is affecting small businesses in both positive and negative ways. Positive effects include competing on international scale and you are able to do business with other countries. According to factoidz.com this is "not all rainbows and flowers". With all these changes small businesses must now lower prices to compete with the larger businesses. This can negatively affect their profit.

Outsourcing is a major negative impact on globalization today. many manufacturing and white collar jobs have been lost because of outsourcing. This is happening because workers are cheaper in places such as India and China. Accountants, programmers and other jobs have gone astray because of outsourcing. Small businesses have also been replaced by the e-businesses because it is cheaper for a company to run off a few customer service employees than many employees to keep a Brick-and-Mortar store open. Many examples of small businesses hurt by e-businesses is travel agencies, brokerages, and accountants. These have been replaced by online companies that can charge less because they have employees they can pay less and they don't have to have as many of the.

E-Business has both positive and negative effects like most everything else for buyers. The advantage or positive effect is that small businesses now have more buying power and can compete with the larger businesses. Because buying or trading with other countries is much easier than 40 years ago, small businesses can now buy cheaper products. They can compete internationally as well. The negative effect or disadvantage this has on small businesses is they have to lower prices to compete with larger companies, which means a lower profit margin.

Technology is growing faster than ever and for a small business to keep its head above water they have to grow as well. If the business keeps up with technology and tries to improve they will have no problem staying afloat.

Resources:

http://factoidz.com/the-effect-of-globalisation-on-small-business/

http://www.buzzle.com/articles/negative-effects-of-globalization.html