In retreat: The multinational company is in trouble
In retreat
The multinational company is in trouble
from The Economist
Donald Trump dislikes multinationals which are shipping jobs and factories abroad and wants to domesticate them
Mr Trump is aggressively attacking multinational companies, which were already in retreat well before the populist revolts of 2016.
Multinational firms employ only one in 50 of the world’s workers. But a few thousand firms influence what billions of people’s lives.
They boomed in the early 1990s. Investors liked global firms’ economies of scale and efficiency. It was a golden age.
For many companies, global reach has become a burden, not an advantage.
With low tax bills, local firms can steal, copy or displace global firms’ innovations without building costly offices and factories abroad.
Governments want global firms for getting wider supply chains, higher R&D abilities and huge amount of tax revenue.
Too big multinationals should shrink or “localise” their businesses, or become “intangible” to survive.
The retreat of global firms will give politicians a feeling of greater control, but it also will make the value of stockmarkets unstable.
The demise of global firms may make the world seem fairer. But it will mean rising prices, diminishing competition and slowing innovation.
