Delocalization

“Delocalization”: a term used to refer to companies moving factories or other operations from their usual locations to new ones.

People (politicians included) like to complain about companies “delocalizing”, and taking jobs away from their region (be it a town, province, country or a continent). They love to argue that the departing company is only moved by profit and has no sensibility for society and the local community.

However, “delocalization” is actually an illusion built on the illusion that things will not or should not change.

Businesses (whether a local business or a multinational opening a new factory or branch) establish themselves in a particular location, at a particular point in time, when it is in their interest. Likewise, new conditions may drive the business to move to another location.

It is not reasonable to expect companies to stay at a given location. “Delocalization” is not such. “Delocalization” seems to imply an intrinsic requirement for businesses to be attached to a certain place or certain people. This is an unfortunate misconception that needs to be extinguished.

People, politicians and public administrations need to think in the context of an ever changing world, discarding any temptation to rely on well known, local structures. A community or society which attempts to tie businesses down (for example, by imposing fines in case of relocation) will only drive businesses away and will limit job opportunities for itself.

Rather than denouncing “delocalization”, efforts should be directed at making local communities competitive, to face new challenges instead of merely deflecting problems (competition) that are sure to come back.

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One thought on “Delocalization

  1. alai

    very good point. I guess the concept of stopping ‘delocaization’ is something some countries/states put a lot of effort on, e.g. taiwan.

    Reply

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