August 31, 2014
Mohamed Eissa

Doing Business in Global Markets and the Effect Technology Has On The Industry

There is no one nation, even with all of todays advanced technology, that can produce all the products its people want or need. Since the beginning of time nations have traded with other nations to get things their people wanted or needed. One reference that comes to mind is the many ships carrying gold, silver and other valuable goods that traveled from Europe to South America to trade their goods for spices.
Exporting simply means selling a foreign country or companies goods and Importing means buying a country or companies goods.
There are 194 countries that make up the global market. Some of these nations such as Venezuela and Russia have abundant natural resources but have little technological know- how, while other countries such as Japan and Switzerland have few natural resources but are rich in technological know- how. Through the process of free trade they can buy or trade their goods or money for things their countries need or want. Free trade is the movement of goods and services among nations without political or economic barriers.
Countries also exchange more than goods and services, such as medical advances, space exploration and even labor. There are two theories of this exchange. The first is the Comparative Advantage which states that a country should sell to other countries the products it produces most effectively and efficiently, and buy those products it cannot produce a effectively or efficiently. The second is Absolute Advantage if one country has a monopoly on producing a specific product or is able to produce it more efficiently than all other countries.
For measuring global trade, nations rely on two key indicators: balance of trade and balance of payments. The balance of trade is the total value of a nation’s