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The 8 Millennium Development Goals Economics Essay

The Millennium Development Goals emanated from United Nation set by all Government leaders at the Millennium Summit, in September 2000. The leaders pledged to strive, individually and collectively towards these goals through international, regional and national action, concerted by the UN. MDGs have been endorsed in the United Nation Millennium declaration and agreed by 189 countries including 147 Heads of State in 2000 to be achieved by 2015. The United Nations Millennium Declaration commits world leaders to combat poverty, hunger, disease, illiteracy, environmental degradation, and discrimination against women. The complete list of Millennium Development Goals, Targets and Indicators first appeared in September 2001 in a UN Document called “Road map towards the implementation of the United Nations Millennium Declaration” after being approved in September 2000. All the MDGs and all have specific targets and indicators and these goals and targets are inter-related and should be seen as a whole. They represent a partnership between the developed countries and the developing countries, as the Declaration states, “to create an environment – at the national and global levels alike – which is conducive to development and the elimination of poverty.”
There are eight MDGs, eighteen Targets and more than forty Indicators and they describe what needs to be done to reduce poverty and achieve sustainable development by 2015.
Goal 1: To eradicate extreme poverty and hunger Targets
1. Halve the proportion of people
whose income is less than one
dollar a day by 2015
Proportion of population below $1 per day
Poverty gap ratio (spread x depth of poverty)
Share of poorest fifth in national consumption
2. Halve the proportion of people
who suffer from hunger by 2015
Number of underweight children (under five years of age)
Proportion of population below minimum level of dietary
Eradication of poverty is achieved through the involvement of a wide range of people making coordinated efforts at international, regional, national, district, village and even family and individual level. Besides the politicians and civil servants, the private sector, Civil Society Organisations and, most importantly, poor people themselves should be involved.
The greatest number of poor people live in South Asia and the highest proportion of poor people live Sub-Saharan Africa. In Sub-Saharan Africa civil conflict, slow economic growth, and the spread of HIV/AIDS have caused the population to be in a distressed conditions. Since poverty trends began to be monitored, the number of people living in extreme poverty and poverty rates fell in every developing region-including in sub- Saharan Africa, where rates are highest. As per the MDGs report 2012, about 110 million fewer people in 2008 than in 2005 lived in conditions of extreme poverty (the proportion of people living on less than $1.25) and he number of extreme poor in the developing regions fell from over 2 billion in 1990 to less than 1.4 billion in 2008. The proportion of workers living below the $1.25 poverty line worldwide was found to decrease from 26.4% to 14.8% between 2000 and 2011.
Poor people do not have enough food to feed their children and themselves, they lack essential nutrients, and undernourished mothers give birth to underweight children. Rise in income and reduction of poverty can alleviate this problem. Extreme poverty thrives on poor health and lack of education that deprive people of productive employment; environmental resources that have been depleted or spoiled; and corruption, conflict and bad governance that waste public resources and discourage private investment. These issues should continue to be addressed in order to succeed in long-term eradication of poverty. 15.5% of the world population have been found to be undernourished as per the most recent estimates of undernourishment by the Food and Agriculture Organisation of the United Nations (published in 2011 for the 2006-2008 period). In the developing regions, the proportion of children under age five who are underweight declined from 29% in 1990 to 18% in 2010. Measures to reduce undernutrition of children under 2 years
Include improved maternal nutrition and care, breastfeeding within one hour of birth, exclusive breastfeeding for the first six months of life, and timely, adequate, safe and appropriate complementary feeding and micronutrient intake in the following 18 months.
Even at the current rate of progress, estimates indicate that about 1 billion people will still be living on less than $1.25 a day in 2015-corresponding to a global extreme poverty rate of just below 16 per cent. Most poor countries now have Poverty Reduction Strategies which describe a set of activities which will lead to pro-poor growth. This makes it much easier for governments to prepare pro-poor budgets and for donors and lenders to know where to give support.
Goal 2: To achieve universal primary education Target
3. Make sure that all boys and
girls are able to complete a full
course of primary schooling by
Net enrolment ratio in primary education
Proportion of pupils starting grade 1 who reach grade 5
Literacy rate of 15-24 year olds
The second Goal proposed in the Millennium Summit is to achieve universal primary education so as to promote equality and social inclusion and reduce extreme poverty. Since 2000, many more children worldwide are enrolled in schools for primary education through national and international efforts and the MDG campaign. In the developing regions, the net enrolment rate for children of primary school age rose from 82 to 90 per cent between 1999 and 2010. The enrolment rate of children for primary education was 76% in sub-Saharan Africa in 2010, an 18% improvement till 2010.
The ratio between the enrolment rate of girls and that of boys also grew from 91 in 1999 to 97 in 2010 for all developing regions and the success at the primary level was found to increased demands on secondary schools. The youth literacy rate has reached 90% in 2010, a 6 % increase since 1990. Yet, 61 million children of primary school age were still out of school in 2010 and more than half of them (33 million) were in sub-Saharan Africa and a further one fifth (13 million) in Southern Asia. New places will have to be created in Africa to accommodate all the children and a change in the population with fewer school-age children and a larger working-age population in the coming years will help in further increasing the youth literacy rate.
Goal 3: To promote gender equality and empower women Target
4. Eliminate gender disparity in primary and secondary
education, preferably by 2005, and in all levels of education
no later than 2015
Ratio of girls to boys in primary, secondary and tertiary education
Ratio of literate females to males of 15-to-24 year-olds
Share of women in wage employment in the non-agricultural
Proportion of seats held by women in national parliaments
Achieving parity in education leads to equal opportunity for men and women in the social, political and economic domains. Driven by national and international efforts and the MDG campaign, many more of the world’s children have enrolled in school at the primary level, especially since 2000. Girls have benefited the most. Between 1999 and 2010, girls’ participation in primary education was found to increase from 72 to 96% in sub-Saharan Africa and from 87 to 97% in Western Asia. This improvement in parity in education leads to a decrease in number of children of uneducated mothers who are at least twice as likely to suffer from malnutrition or die before they are five than are the babies of mothers who managed to finish primary school. Further, it has been noted that educated mothers make sure that their daughters get a good education which helps them to get out of the circle of poverty and to lift them to higher standards of living. Gender disparities were found to emerge at different points through the education system. Girls further faced barriers at the secondary level of education than at the primary level and the gender parity index (GPI) in secondary education in the developing world as a whole was 96 in 2010, compared with 97 for primary education. This is a result of gender-based discrimination in the family and society where girls’ education is less valued and that of boys is favoured due to poverty. Further, early marriage and worry about the security of adolescent girls on the way to the school form part of the secondary education barriers for girls.
In 2010, the GPI for tertiary education reached 98 for the developing world, indicating achievement of parity. While high GPI were observed in Latin America and the Caribbean, South-Eastern Asia, the Caucasus and Central Asia, Northern Africa and Eastern Asia, the parity in tertiary education remains difficult to attain in sub-Saharan Africa (with a GPI of 63), Southern Asia (76) and Western Asia (89). Informal training, such as adult literacy classes, can make up some of the difference.
Even when gender differences in education get less, other differences continue; for example in legal rights, access to job opportunities, and the ability to take part in public life and decision making. Women’s share in paid jobs outside of the agricultural sector was found to increase slowly on a global basis, from 35% in 1990 to 40% in 2010. Women’s share of national parliamentary seats is increasing, and by January 2012, women accounted for 19.7% of parliamentarians worldwide an increase of nearly a 75% since 1995, when women held 11.3% of seats worldwide. The proportion of seats in parliaments held by women, reached about one third in Argentina, Mozambique and South Africa and 17.1 % in Mauritius in 2010 (IndexMundi, 2011).
Goal 4: To reduce child mortality Target
5. Reduce the number of under five
children who die by two
thirds by 2015
Under-five mortality rate
Infant mortality rate
Proportion of 1-year old children immunised against measles
The World Health Organisation estimates that more than two thirds of child mortality results from a combination of malnutrition and disease and this could be prevented by better funded and improved efficiency of the public health services delivered to all people in all parts of all countries. Boy and girl babies are found to have about the same chances of survival but rural babies and young children are from a fifth to a half more likely to die than those who live in urban areas. Household surveys have shown that a child from a poor family is more than twice as likely to die as a child from a rich family. In the developing regions, the mortality rate was found to decrease by 35%, from 97 deaths per 1,000 live births in 1990 to 63 in 2010. While Northern Africa has already has achieved the MDG 4 target, by bringing down the child mortality rate by 67%, and Eastern Asia is close to this achievement with a 63% decline, Sub-Saharan Africa and Oceania have achieved reductions of only around 3%, less than half of what is required to reach the target. Child mortality falls by more than one third, but progress is still too slow to reach the target, insufficient to reach the two-third reduction by 2015.
As mentioned earlier, mothers’ access to education is a factor for the survival of children under five years of age. Children of educated mothers were found to be more likely to survive than children of mothers with no education. Further, empowering women, removal of financial and social barriers to access basic services and improving health system are policy measures that improve equity can prevent far more child deaths and episodes of undernutrition.
While there is an overall decline in under-five deaths overall declines, the proportion of death that occurs during the neonatal period (the first month after birth) is increasing. . Globally, deaths within the first month of life fell from 32 per 1,000 live births in 1990 to 23 in 2010. Reductions in measles-related mortality have contributed to the improvements in child survival. Accelerated efforts through improved routine coverage among children in the appropriate age group who received the first dose of measles-containing vaccine (MCV1) to reduce measles deaths have resulted in a 74% reduction in global measles mortality from 2000 to 2010. This decline in measles deaths is also attributed to the successes of supplementary immunization activities (SIAs) in vaccinating children who are beyond the reach of existing health services. Sub-Saharan Africa had an 85% drop in measles deaths between 2000 and 2010. Worldwide, however, reported measles cases took a turn upward in 2010, after decreasing from 2000 especially in Africa, the Eastern Mediterranean, Europe, Eastern and South-Eastern Asia and Oceania. Resuming the progress in reducing measles-related mortality cases is an important challenge that can be met making further headway on the measles objectives set forth in 2010 by the World Health Assembly and by addressing recent complacency and declines in political and financial commitments to measles control.
Goal 5: To improve maternal health Target
6. Reduce the maternal mortality ratio by
three quarters by 2015
Maternal mortality ratio
Proportion of births attended by skilled health
More than half a million women in developing countries die from complications of pregnancy and childbirth every year, however the maternal mortality has nearly halved since 1990, but levels are far removed from the 2015 target. An estimated of 287,000 maternal deaths occurred in 2010 worldwide, a decline of 47%from 1990. In Sub-Saharan Africa the highest birth rate was found among adolescents (120 births per 1,000 adolescent women), with little progress since 1990 which is linked to outcomes such as lower educational attainment and poverty. Sub-Saharan Africa also had the largest proportion of maternal deaths attributed to HIV, at 10%.
In industrialised countries the risk of a mother dying in childbirth is 1 in every 4100; in Sub-Saharan Africa it is 1 in every 13. Many women in poor countries with no access to a proper healthcare system deliver their children alone or with traditional birth attendants who lack the skills to deal with complications during delivery. A skilled health professional (doctor, nurse or midwife) can administer interventions to prevent and manage life-threatening complications such as heavy bleeding, or refer the patient to a higher level of care when needed. In developing regions overall, the proportion of deliveries attended by skilled health personnel rose from 55 % in 1990 to 65% in 2010. Prenatal care can also help to reduce maternal mortality and morbidity.
Poverty and lack of education is responsible for high adolescent birth rates and insufficient funding for family planning is a major failure in fulfilling commitments to improving women’s reproductive health. Maternal mortality can be prevented by wider spacing of pregnancies, better nutrition and prenatal care, and more skilled birth attendants and emergency clinics. Further, increased access to safe, affordable and effective methods of contraception has provided individuals with greater choice and opportunities for responsible decision-making in reproductive matters. Contraceptive use has also contributed to improvements in maternal and infant health by serving to prevent unintended or closely spaced pregnancies. More than half of all women aged 15 to 49 who were married or in a union were using some form of contraception in 2010 in all regions except sub-Sahara Africa and Oceania.
Goal 6: To combat HIV/AIDS, malaria and other diseases Target
7. Halt and reverse the
spread of HIV/AIDS by
Amount of HIV among 15-to-24-year-old pregnant women
Use of contraceptives
Number of children orphaned by HIV/AIDS
8. Halt and reverse the
spread of malaria and
other major diseases by
Amount of and death rates associated with malaria
Proportion of population in malaria risk areas using effective malaria
prevention and treatment measures
Amount of and death rates associated with tuberculosis
Illiteracy and ignorance and consideration of the topic HIV/AIDS as taboo in many countries has help the disease to spread. In 2011, an estimated 34.2 million people worldwide were living with HIV, a 17% increase from 2001. This continual increase results from continued large number of new infections and to fewer AIDS-related deaths. The number of people dying of AIDS-related causes fell to 1.8 million from 2.2 million in 2010. Introduction of antiretroviral therapy has led to a prevention of a total of 2.5 million deaths in low- and middle-income countries since 1995.
At the end of 2010, 6.5 million people were receiving antiretroviral therapy for HIV or AIDS in developing regions which represents a 1.4 million increase from December 2009, the 2010 target of universal access was largely missed and at this rate, less than 14 million people will be receiving antiretroviral therapy at the end of 2015, over one million short of the target agreed at the United Nations High-level Meeting on HIV/AIDS, held in June 2011. The largest gain of 38% in antiretroviral therapy coverage came in Eastern Asia while in sub-Saharan Africa, treatment expanded by only 20%. More than 50% of eligible people in sub-Saharan Africa still are not receiving antiretroviral therapy and in the absence of treatment, approximately one third of children born to women living with HIV will become infected in the womb, at birth or through breastfeeding. The risk can be greatly reduced by treating an expectant mother with antiretroviral medicine. In 2010, an estimated 48% of pregnant women living with HIV in developing regions received the most effective antiretroviral regimens.
Comprehensive, correct knowledge of HIV and AIDS and access to HIV testing are essential to the uptake of HIV services and to behavioural change; however, such knowledge remains low in sub-Saharan Africa. Further the use of condom remains low among young women in most countries which may be linked with limited availability. In sub-Saharan Africa, only eight condoms are available per adult male per year.
Malaria is common in more than 100 countries affecting about 300 million people each year. In 2000, in Sub-Saharan Africa, 880,000 children under five died of malaria. Prevention and timely treatment can prevent a lot of these deaths. The coverage of at-risk populations with malaria prevention and control measures continues to increase, bringing about a decline in estimated numbers of malaria cases and deaths. More than 50% reductions in reported malaria cases have been recorded between 2000 and 2010 in 43 of the 99 countries with ongoing malaria transmission. The estimated incidence of malaria globally has decreased by 17% since 2000, and malaria-specific mortality rates by 25%. Although these rates of decline are slow, they nevetheless represent a major achievement. This situation is being improved through International funding for malaria control which continued to rise, enabling endemic countries to greatly improve access to insecticide-treated mosquito nets (ITNs). Shortfalls in funding jeopardize success in achieving the health-related Millennium Development Goals, especially in Africa. Further resistance to artemisinins-a vital component of drugs used in the treatment of P. falciparum malaria-has been reported in a growing number of countries in South-Eastern Asia which can potentially threatens future progress.
Tuberculosis was found to kill 1.7 million people each year mostly between the ages of 15 and 24. The number of cases has been growing rapidly in Sub-Saharan Africa and South Asia in the last ten years. In 2010, there were 8.8 million people worldwide newly diagnosed with tuberculosis, including 1.1 million cases among people with HIV and 1.4 million deaths from tuberculosis. Trends in prevalence rates indicated that an estimated 12 million people were living with the disease in 2010. Between 1995 and 2010, a cumulative total of 46 million tuberculosis patients were successfully treated under Directly Observed Treatment Short Course (DOTS) strategy (during 1995-2005) and its successor, the Stop TB Strategy (launched in 2006). Up to 7 million lives were saved. Yet, over 84% of the estimated 290,000 cases of multi-drug resistant tuberculosis in 2010 were not being diagnosed and treated according to international guidelines. Gaps in funding remain large, despite increases over the past decade.
Goal 7: To ensure environmental sustainability Target
9. Integrate the principles of sustainable development into country policies and programmes and reverse the loss of environmental resources by 2015
Proportion of land area covered by forest
Land area protected to maintain biological diversity
GDP (Gross domestic product) per unit of energy use (as substitute for energy)
Carbon dioxide emissions (per capita)
10. Halve the proportion of people without sustainable access to safe drinking water by 2015
Proportion of population with sustainable access
to an improved water source
11. Make a significant improvement in the lives of at least 100 million slum dwellers by 2020
Proportion of people with access to improved sanitation
Proportion of people with access to secure tenure
The environment provides people with everything they need to stay alive and to develop. Poor people, especially those in rural areas, often get most of what they need to survive directly from the environment. They therefore suffer most and most quickly if it is taken away from them or destroyed. Globally, forest management and conservation provide employment for around 10 million people,. The net loss worldwide of forests was found to decrease from 8.3 million hectares per year in the 1990s to 5.2 million hectares per year in the last decade. This reduced rate of forest loss is due to less deforestation plus the establishment of new forests, as well as the natural expansion of existing forests. Greenhouse gas emissions also affects the environment through climate change and carbon dioxide emissions has been found to decrease by 0.4% globally which can be attributed to slowing economic activity during the global crisis. Even as more areas of the earth’s surface are protected, biodiversity is still being lost, because despite an increase in these protected areas, half of the world’s most important terrestrial sites for species conservation remain unprotected. The overexploitation of global fisheries has stabilized, but steep challenges remain to ensure their sustainability. Fishery policy and management will need to focus on overcapacity and on integration with national political and economic decision making.
The number of people using improved drinking water sources has increased over 2 million since 1990, reaching 6.1 billion in 2010. In 2010, 89 percent of the world’s population was using improved water and the number of people who do not use any facility and resort to open defecation has decreased by 271 million since 1990. But therstill e remain 1.1 billion people, or 15 percent of the global people with no sanitation facilities at all. Progress was found to be slowest in Western Asia and sub-Saharan Africa, and no improvement was achieved in Oceania over the 20-year period and at this pace, by 2015 the world will have reached only 67 per cent coverage, well short of the 75 per cent needed to achieve the MDG target. On the other hand, the share of urban slum residents in the developing world was also found to decline from 39% in 2000 to 33% in 2012. More than 200 million of these people gained access to improved water sources, improved sanitation facilities, or durable or less crowded housing, thereby exceeding the MDG target. This achievement comes well ahead of the 2020 deadline.
Goal 8: To develop a Global Partnership for Development Targets
12. Develop further an open, rule-based,
predictable, non-discriminatory trading and
financial system
Proportion of Official development assistance (ODA) to basic social services
13. Address the Special Needs of the Least
Developed Countries
Proportion of ODA that is untied, for environment in small island developing States, for transport sector in
landlocked countries
Proportion of exports (by value and excluding
arms) admitted free of duties and quotas
Average tariffs and quotas on agricultural products and textiles and clothing
Domestic and export agricultural subsidies in Organisation for Economic Co-operation and Development countries
Proportion of ODA provided to help build trade
14. Address the special needs of landlocked
countries and small island developing States
35. Proportion of ODA for environment in small island developing States (repeat)
Proportion of ODA for transport sector in
landlocked countries (repeat)
15. Deal comprehensively with the debt
problems of developing countries through
national and international measures in order to
make debt sustainable in the long term
Proportion of official bilateral Heavily Indebted Poor Countries debt
Debt service as a percentage of exports of goods
and services
Proportion of ODA provided as debt relief
Number of countries reaching HIPC decision
and completion points
16. In cooperation with developing countries,
develop and implement strategies for decent
and productive work for youth
Unemployment rate of 15-to-24-year-olds
17. In cooperation with pharmaceutical
companies, provide access to affordable
essential drugs in developing countries
Proportion of population with access to
affordable essential drugs on a sustainable basis
18. In cooperation with the private sector,
make available the benefits of new
technologies, especially information and
Telephone lines per 1,000 people
Personal computers per 1,000 people
Developing countries are responsible for their own policies and actions but most of them need the support of industrial countries and the international community to tackle the enormous problems which they face. The core development aid was found to falls s donor countries face fiscal constraints. In 2011, net aid disbursements amounted to $133.5 billion, representing 0.31% of developed countries’ combined national income, still far short of the 0.7 per cent UN target. While constituting an increase in absolute dollars, this was a 2.7% drop in real terms over 2010. If debt relief and humanitarian aid are excluded, bilateral aid for development programmes and projects fell by 4.5% in real terms. Aid to the African continent increased by 0.9% to 31.4 billion in 2011, but remains below expectations. Further, the decrease in tariffs applied to products exported by developing and least developed countries in 2010 was found to be significant only in the case of agricultural products. Better debt management, the expansion of trade and, for the poorest countries, substantial debt relief have reduced the burden of debt service. A decline from 12.6% to 3.4% in the ratio of public and publicly guaranteed debt service to exports for developing regions was observed between 2000 and 2008. In 2011, 75% of the worldwide mobile cellular subscriptions were in the developing regions and by the end of 2011, over 160 countries in the world had launched 3G mobile broadband services and 45% of the population worldwide was covered by a high-speed mobile broadband signal. Moreover, the developing world share of the world’s Internet users rose to 63 percent in 2011, when 35 percent of the world was online, indicating improvement in access to new technologies, especially information and communication.
Achieving the MDGs by 2015 is challenging but possible. Much depends on the fulfilment of DG-8-the global partnership for development. Current economic crises in the developed world must not be allowed to slow down or reverse the progress that has been made till date.

The Plan Of Honda During Globalization Economics Essay

Firstly, International Business is the performance of trade and investment activities that have been done by firms across national borders when it takes place between two or more countries. It is also known as cross-border business. Individual firms, governments and international agencies are involved in the international business transactions. The assets that exchange by firms and nations mostly are physical and intellectual assets which including products, services, capital, technology, know-how and labor. Moreover, international business gives us the opportunity to access the products and services from all around the world and it could profoundly affects the quality of life and the economic of the country (Cavusgil et al. 2008).
Besides that, there are two types of integration which is negative integration and positive integration. Negative integration could refer to barriers between countries being removed such as tariffs and quotas while positive integration could refer to standardizing international economic laws and polices (The non-hub story 2010).
Multinational Company (MNC) also known as Multinational Corporation is the most important type of the focal firm. It is a direct resource with the various business activities that which is through the subsidiaries and the affiliates that which located in the multiple countries. MNC has its own worldwide of the network and it has corporate with the numerous of the suppliers and the independent business partners of the abroad. MNC is among of the leading participants and many small and medium-sized enterprises participate as well.
Multinational company can be categories into 3 elements which is horizontally integrated multinational corporations, vertically integrated multinational corporations and diversified multinational corporations.
Horizontally integrated multinational corporations
Corporations that manage productionestablishments in different countries that produces similar products.
Vertically integrated multinational corporations
Manage production establishment in certain countries to produce products as input to its production establishment in other countries.
Diversified multinational corporations
Production Establishment is either horizontally or vertically integrated.
HISTORY OF HONDA Honda is the world’s largest motorcycle manufacturer since 1959 and the world’s largest manufacturer of internal combustion engines measured by volume, producing more than 14 million internal combustion engines each year. It is established by Soichiro Honda in 1948. Due to the World War II, Soichiro Honda developed and produced small 2-cycle motorbike engines. It is because during that time Japan was facing gasoline storage and they needed inexpensive transportation that need less gasoline (The non-hub story 2010).
Now, the ranking of Honda in automobile manufacturer around the world is number sixth. The first Japanese automobile manufacturer that releases a dedicated luxury brand is Honda. Besides that, Honda is also producing lawn and garden equipment, tillers, robotics, marine engines, personal watercraft and power generators. The headquarters of Honda is located at Minato, Tokyo, Japan (Wikipedia 2010).
Macro-environment for automobile industry in host country (PEST analysis): Firstly, the automotive sector is an important yet complicated sector. However, they could use PESTLE analysis to help them in making strategies. PESTLE analysis is a tool that can help organizations making strategies by letting them know about the external environment so they could plan their operate time whether they want to operate now or operate in the future. PESTLE stands for political, economic, social, technological, legal and environment.
The people will see a continued progress in the ruinous steps which have forced the industry into a social politico economic corner. Whether this is related to flat demand or to the industry’s creation of an ever-wider range of vehicles that many buyers seem to care little about, there is a problem. The manufacturing is like linked approach to the policies of governments, the earnings of banks. Little wonder then that so many emerging countries are keen to develop an auto sector or that there is such a political pressure to protect it in the developed countries. The world’s vehicle industry is currently dominated by little more than a handful of firms, each wielding colossal financial, emotional and political power. The manufacturing closely to dealing with political institutions has not always been bright. It tends to be good on technical issues, although it has not always fully presented the longer-term options, but in order to make the choices and their clear.
For much of the developed world, and increasingly for the developing world, the automotive industry is a pillar industry, a flag of economic progress. Without an automotive industry, it is impossible to develop an efficient steel business, a plastic industry or a glass sector – other central foundations of economic progress. The automotive industry has been a core industry, a unique economic phenomenon, which has dominated the twentieth century. However, the industry now suffers from a series of structural schisms and has become riddled with contradictions and economic discontinuities. For the capital markets and the finance sector, it has lost a lot of its significance, as a result of ever declining profits and stagnant sales. The proliferation of products means that it has become hopelessly wasteful of economic resources. While all these and more sound like a very gloomy assessment of such a vast economic phenomenon, the industry is not in the end despondent. A different future is possible for the industry, a highly desirable one.
The world’s automotive industry affects the society as a whole. It employs millions of people directly, tens of millions indirectly. Its products have transformed society, bringing undreamed-of levels of mobility, changing the ways people live and work. The social value of the additional mobility that this industry brings involves the value of the people being able to commute over longer distances easily, among many others. For most of its existence the motor industry has been a model of social discipline and control and it is not just that the auto sector offers a ‘pillar’ of something else. There are, on the other hand, particular social issues to address in many developing countries, often those that are the result of an undertone of religious faith. The automotive industry has the role to play in helping develop the mobility of such countries and it can be achieved at an acceptable social cost of the country is prepared to learn the necessary lessons from those who have traveled this route before it, and to make the necessary investments.
The automotive industry works on a scale so awesome and has an influence so vast that it is often difficult to see. The level and diversity of technologies that it must deploy are increasing, which imposes both new investment burdens and new uncertainties and risks. Roughly a million new cars and trucks are built around the world each week – they are easily the most complex products of their kind to be mass-produced in such volumes. The industry uses manufacturing technology that is the cutting edge of science. But still, the potential for developing coordination skills, intellectual capabilities and emotional sensitivities through electronic technologies remain far from fully exploited. There are numerous additional near-term technological opportunities to adapt the automobile to changing energy availability. The possibilities suggest that automotive technology is unexpectedly robust and provides a powerful defence against energy starvation even if the real price of oil climbs steadily during the next couple of decades.
The automobile industry is subject to numerous technical directives and regulations, as well as legislation of a more legal nature. The legislation covers areas such as competition law, intellectual property law, consumer protection and taxation, and emissions (air quality and fuels). When the auto parts industry reached full development, accelerated technological efforts were made to create a web of local suppliers that would make it possible to meet the growing legal requirements for the national integration of production.
Other than the vehicles themselves, and the roads and fuel needed to run them; the business is intricately tied to the manufacture of a wide range of components and the extraction of precious raw materials. Indirectly, it brings people road congestion, too many fatalities and a wave of other environmental troubles. The effect to the automotive companies are that they needed to establish R