Business in Europe Essay
1. What do you understand by the reform process? What does it seek to achieve? By definition, reform process refers to any efforts or movement that happened during the 16th-century in Western Europe that intended to reform some doctrines (Answer, 2008). Recently, the European Reform represents a vision to improve The European Union’s economic, social and political conditions through redesigning their overall system of management. It has been long regarded that countries within the European Union are actually operating largely under their own policies and agendas.
As a result, larger issues and longer term issues that affected the European Union as a whole often lack considerations. In addition, the present governance system of the European Union can not longer cope with managing 27 countries and maintain sound political and economical decisions for the EU. Many have addressed this matter through articles, discussion and proposals. The latest agreement was to perform efforts to restore leadership to the European Union. Every one of those efforts was designed to address a problem which is considered vital for improving EU’s economic, social and political management. Some of them are:
? Designing a full time European Council President The president of the EU is elected by the
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Moreover, EU’s external partners (international partners) often complained about the every-six-months-changes of rules and policies they have to cope with. In the reform treaty, it is suggested that a full-time European Council President that will chair EU’s meetings for 2. 5 years. ? Creating a Stronger Foreign-Policy Representative As a gathering of powerful economies in the world, the European Union has the responsibility to address international problem in addition of their own. Problems like poverty in Africa, Nuclear-armed Iran and climate change issues demand considerations from the EU as a whole.
Presently EU already has a commissioner of external affairs (with 10 billion euros of budget and a team of specialists), but he/she has weak diplomatic powers, because there is also another position that holds similar tasks. The council’s high representative acts as the spokesman/woman for the 27 member-states. Reconciling between the policies of these two officials has been proven difficult to obtain. Thus, the reform treaty suggested that the two positions are merged into one official with the freedom to act only upon the unanimous agreement among the 27 member-states.
? Creating a Smaller Commission The present European Commission consists of 27 member states with each needing their own portfolio. The system is of course, becoming highly over-extended when members of the commission started to feel an obligation to defend their own state. The reform treaty suggested that a smaller commission would be better for EU. The latest consideration was to split the commission members into senior and junior commissioners to reduce the number of portfolios (Brady, 2007. Grant, nd) There are many other policies created and dedicated to make a better European Union.
Most of them affected the social, economic and political condition of EU interchangeably. 2. Why is reform such a contentious issue? There has been a considerable amount of contentiousness regarding the reform treaty because the treaty is expected to result significant changes in the EU and for its member countries. The natural position of any government is to stand up on the behalf of their state’s interests, and this individual behavior is what makes it difficult for the reform to work in a rapid manner. Within the latest decade however, there are notable realization among EU’s member states that they are in desperate need for a change.
Globalization can be mentioned as one of the important factors that theoretically causes the realization. As globalization grows, countries find themselves in closer competition against each other, even when they are continents apart. Therefore, the European Union must not dwell in its protective policies and find a way to remain competitive against external competitors. To achieve this, a better coordination is required so the European Union could work as a team rather than pursuing their own agendas. 3. Is reform inevitable or does the resistance to the process highlight the limits to globalization?
In my perspective, the reform is unavoidable. Globalization has to involve all countries around the world or it will simply become a tool for the developed economies to take advantage of less defensive ones. If the UE decided to maintain its protective policies and refuse to reform their political, economical and social management system, the principles of globalization as a whole will collapse. It is only a matter of time before the demands and critics bring the EU toward a reform toward a more united and competitive EU. 4. What do you understand by innovation and why is it important?
Innovation is integral in the reform treaty of European Union. It is about changing from a situation to a better one. Innovation is the vital ingredient that made possible the ideas that lead to the reform policies currently discussed. Without the willingness to change and innovate, the European commission and the management system of the European Union will not be transformed into better forms. PART 2 1. What is globalization? In a wholesome perspective, globalization is actually the combination of various political, economic and social forces into one.
Therefore, the drivers of the phenomenon are actually numerous, like economic needs, social interactions and political collaborations. In reality however, the most influential driver of globalization is actually economy and economic activities. 2. What is driving globalization? By definition, globalization refers the tendency of a business, marketing, technologies, and thinking to spread worldwide. Globalization also refers to any conduct or process that make this happen (SearchCIO, 2008). Globalization is characterized by the lower boundaries of interaction between people of different national background.
These boundaries could be economical or political in nature. After World War II, the GATT agreement pioneered the first modern globalization. It reduces barriers of cross-border trade using various means, like elimination of tariffs, creation of free trade zones, etc. The presence of such regulations increases the volume and frequency of cross border trading significantly. As the number of international trading enhances, the level of economic integration between the countries involved within the transaction also enhances.
The economic integration then functions as a bridge for integration in other aspects, like social integration, technological integration and finally, cultural integration. When these relationships endured for quite some time, globalization has been established (Capra, 2007). 3. What are the companies that are investing in Europe and why are they investing? One of the main advantages of globalization is that business people around the globe are provided with the freedom to choose the most suitable suppliers or customers for them from around the globe.
Thus, some economy might be known for certain capabilities in certain industries while others are not. Investing in these countries, investors are hoping to gain significant investment from returns generated. Europe, for instance, have many investors investing in new technologies like the solar cell. 4. What are they looking for? The wave of investment into Europe happens since companies need to invest in a market that provides both good supply and growing markets. To some extent, Europe is acknowledged for its innovation capabilities.
Another industry in Europe that is accepting considerable amount of investment is the healthcare industry. Biopharmaceuticals, new drug development and genetic analysis are the discipline receiving the largest amount of investment in healthcare. Other industries, like IT and electronics, are reported to experience a steady decline over the last several years (‘Later stage’, 2006). 5. How can Europe make itself attractive for an outside investor? In facing the increasing challenges of globalization and the demand to gradually lower protective policies over their economy, Europe is in a need for developing the attractiveness of its regions.
This is necessary so the EU will not be diminished in economic dominance after all the economic barriers are put to rest. In order to increase the attractiveness of all the members of EU however, there are obviously no ‘one size fits all’ solutions. One thing that most observers have agreed upon however, Europe needs to focus on developing its innovation so that the economy can move up the value chain (Hubner, 2006). In order to improve the extent of innovation however, Europe needs to perform a bottom-up approach.
This means resources that are essential for innovation must be developed first. The defined resources are: research institutes, solvent financial institutions, innovative SME’s, technology centers, etc. Europe must put considerable efforts into ensuring that each of these facilities is well developed in every region. Another factor of concern is the creation of local knowledge and expertise to stimulate growth and change. Companies must be educated to collaborate with suppliers and others within their value chain to create local knowledge that in the end will transform itself into innovation.
Human capital and information and communication technologies are also crucial factors that require attention. The development of all of these facilities however, must not diminish efforts to increase the quality of economic infrastructure in the EU regions. Because each region has different level of infrastructure, EU as a whole must pay attention to regions with poorly develop infrastructure. The development of infrastructure remains the most important foundation of economic development.
In order to achieve the visions mentioned above, regions of EU require the support of EU as a whole. Thus, a better management system is required so that member countries would think for EU as a whole and not its individual economy. This is further proven the importance of the reform treaty. Although not entirely, most parts of the world has adopted the principles of globalization. This is proven by the latest circumstances of the global economy, which is in a rather downward slope because of the subprime lending crisis in United States.
Due to globalization, the crisis have even crossed the Atlantic and affected not only the developed, but also the developing countries around the globe. Europe has also been affected significantly by this phenomenon that the European Central Bank has injected billions of Euro into the market to remedy the situation. In addition to this problem, the global economy is also currently facing crisis over another problem, which is the rising price of oil that increases the price of energy all around the world. These two problems are predicted to negatively affect the world economy for quite some time into the future.
To face those challenges, EU economy must make all the necessary changes to ensure that all resources have been deployed to strengthen EU’s economy and increase its competitiveness in the global market.
Answer. (2008). Reformation. Retrieved March 31, 2008 from http://www. answers. com/topic/reformation Brady, Hugo, 2007. ‘Europe’s “reform treaty”: ends and beginnings’. Hugo Brady. Retrieved march 30, 2008 from www. opendemocracy. net/article/democracy_power/ europe_constitution/lisbon_reform_treaty