EU Enlargement: The Dark Side of Globalization

As the European Union opened trade and borders, foreign investors set up shop in communities throughout the former Soviet Republic. For example, Samsonite opened a factory in Samorin, Slovakia, in 1997. But the jobs and economic development were short-lived, with Samsonite moving its production line on to China a decade later. “Samorin is a witness to the way that globalisation is fragmenting as supply chains break into ever smaller parts, sending jobs in all directions,” explains an article in the Econmist. The workers do not complain, the article notes, and strive for flexibility. Countries must prepare for job loss and the repercussions of higher labor costs, notes one EU official, adding that countries and companies can compete in two ways – low labor costs versus innovation and quality. Governments target either strategy, designing specific policies for what has become a highly mobile business environment. – YaleGlobal