Canadian Economy and Global Business Interactions

Business Ownership and International Markets

Most businesses are owned by foreign companies or use markets/suppliers in other countries. Methods of international business involvement include:

• Owning a retail or distribution outlet in another country.
• Owning a manufacturing plant and exporting.
• Importing from businesses in another country.
• Investing in businesses in another country.

Historical Context and Emerging Markets

First Tier Trade Partners (1st TTP): French and British. Asia during World War II.

Three Emerging Markets: Middle East, Africa, India, and South America.

Example: Morocco exports clementines. Canada has a weak manufacturing sector.

Industrial Sectors Defined

Second Industry: Adds value by creating finished goods from raw materials extracted by primary industries.

Third Industry: Adds to final value by making goods available to consumers.

Branch Economy Concept

An economy relies on foreign ownership of its industries for jobs and investments.

Four Ways IT Benefits Canada

Information Technology (IT) helps Canada by allowing businesses to:

1. Choose from a variety of products.
2. Access new markets with their goods and services and expand their businesses.
3. Have greater opportunities to attract capital investment.
4. Share in the new discoveries of other nations.

Portfolio Investment helps Canadian firms expand and enter foreign markets.

Research and Development (R&D)

R&D departments hire new engineers, scientists, and professionals to create new products or processes for the firm. This not only makes the company more competitive internationally but also helps retain highly educated professionals in Canada.

Negative Impacts on Canada

Hurts Canada:

• Loss of culture and identity.
• Increased foreign ownership of Canadian companies; foreign companies have foreign loyalties.
• Lack of R&D investment domestically.
• Reduced exports.
• Revenues leave Canada to pay head office fees.
• Economic destabilization (culturally and economically).

Music Artist Production Lyrics

Understanding Globalization

Globalization: It is now easy for companies with many resources to expand into other nations. Globalization has integrated sales, finance, global monetary markets, manufacturing, transportation, and communication around the world. The whole world's economy may be affected by events in one place.

Modern globalization began after World War II with the establishment of the United Nations, fostering trade relations between countries, reducing tariffs, and controlling capital flow.

US Cultural Dominance in Canada

US culture is so dominant in Canada—almost 90% of Canadians live less than 160 kilometers from the US/Canada border. The US has a huge entertainment industry that produces big-budget movies and television programs and distributes them through a chain of theaters or television networks and cable stations to Canadian customers. Only 35% of music played on Canadian radio shows is Canadian content.