This LA Times article nicely sums up many of the reasons why globalization has been good for US businesses, that is, those US businesses who take full advantage of globalization. Here’s an excerpt:
- Take General Electric Co., where rising profit from foreign operations pushed overall earnings up 25% in the first quarter. And last week Caterpillar Inc. in construction equipment, Intel Corp. in computer chips and EBay Inc. with an enormous rise in international auction trading all reported sharply higher earnings thanks to global growth.
Indeed, a quarter of all U.S. corporate profits, or about $225 billion, were earned outside the United States last year, according to the federal Bureau of Economic Analysis.
GE was a pioneer in embracing global markets (although its global Web site could use some improvement). And eBay is betting big on emerging markets like China, Poland, and (I predict) Russia by the end of this year.
By this time next year, companies like eBay, Amazon, and Google could be earning as much (or more) of their revenues from outside the US as they do from inside the US. This is a profound transformation, in which smart and aggressive companies will transform themselves from US companies serving foreign markets to global companies serving local markets. Globalization is good for companies that see it as much of an opportunity as a threat.