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  • Writer's pictureJessica Proctor

Apple and Transnational Corporations

Transnational Corporations are companies that operate in two or more countries; usually with their headquarters in high-income countries, and their manufacturing in a low-income country.

Apple is a huge TNC, which has its headquarters in Cork, Ireland, and its manufacturing in Shenzhen, China. Apple is the second-largest IT company by revenue globally, and it is also the largest music retailer, so it has a large significance in the global marketplace. Apple employs a huge 98,000 employees and has 450 retail stores spread across 16 countries, though there are many benefits and problems for both the host country (China) and the country of origin (Ireland).

A major benefit for China includes the generation of jobs. China is a newly emerging economy and by placing the manufacturing in this country jobs are created where they may not have been available before. This is an economic benefit because china's national GDP will increase and so will employee’s disposable income. Furthermore, Apple's job production will create an enormous social benefit because people will be happier and able to afford healthcare and education, meaning a better quality of life. Moreover, in Shenzhen, a special economic zone has been created which provides incentives for other companies to invest there. On a local scale, this will provide lots of jobs because other large companies want to be in the same area as Apple, and on a national scale this will boost the economy - however it will not be good for the global environment as there will be lots of emissions released from factories which would contribute massively to global warming.

The problems placed on Shenzhen by Apple outweigh the benefits significantly. In 2010, over 200,000 people were working over 60 hours a week for only $100 a month which is an exploitation of the Chinese community who need the jobs because TNC’s know they may not be able to find them anywhere else so they will work for low pay. Many of those 200,000 were children, which would be illegal in HIC’s, however, this is a benefit for Apple because their wage costs will be less as children do not need to be paid as much. Working long hours will have a social effect because it means people will be very tired lowering their quality of life and, economically, although there is still money being made it is potentially less than could be made elsewhere. Additionally, in 2010, there were 45 suicides from workers in the Shenzhen factory, which proves how draining and unrewarding this job is. In 2010 hundreds of workers were poisoned by a toxic iPad cleaner which affected the health of many workers and was also toxic to the environment. The problems Apple causes significantly outweighs the benefits.

In the origin of Cork, there are also many benefits: Apple employs 4,000 people there, many of them locals, which is a large portion of the local community. This means the economy has increased, and so has the value of the area because the GDP per capita has increased. The company's presence attracted other high-tech companies such as Coca-Cola to the area which has generated more jobs, modernised Ireland, and boosted its economy as a whole. Furthermore, people will have more money for essentials meaning lower poverty rates and better quality of life. There were also infrastructural improvements being made in Cork which improves the environment the locals live in and could attract tourists. Clearly, there are many more benefits to Apple being in Ireland than in China.

In contrast with the good, there are also a few minor problems in Cork. Many have argued there is not sufficient work for locals as most of the employees are highly skilled foreigners, mainly from Europe, but by doing this I believe Apple has created a more intelligent country in Ireland as a whole, especially being that the workers remained in the continent of Europe so the economy will still be positively affected. It has also been found that Apple has committed tax avoidance as they’re favourited by the Irish government, which may mean Ireland is not as developed as it could be economically or infra-structurally because the government has less money. However, I believe these are minor problems on a small scale compared to the huge benefits.

Overall, the presence of Apple in both countries is not solely negative or positive. A huge number of jobs have been created for both countries. There is much better treatment of workers in the origin country compared to the host country. I'd say the presence of Apple is negative despite the benefits because they don't compensate for the mistreatment of workers and other multitudes of problems it causes in Shenzhen. Problems are caused in LIC’s to a larger extent.

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