How Global Economic Melt Down Effects Small Scale Business

The Influence of International Economics

When it comes to economics, there is a lot to understand and a lot to learn. However, one thing that is certain is that there would be no need for economics if there were no businesses.  The biggest threat to big business, which practically runs economics on a global scale, is that of vanishing small businesses.  To put it in terms I understand best, without a small company that is willing to do the hard tasks that larger companies prefer not to do, those larger companies could not provide goods or services to the consumer.  Below is a chart of the manufacturing flow of general goods.

 

This cycle, though specific, still does not cover the extent of the business exchanges on such a simple thing as Bose products. Though the products are high tech, the consumer only needs to walk into a store to purchase them.  From the small business selling the screws to Haas, all the way to the consumer, there is a huge amount of small scale business exchange going on that is essential to the large scale business of both Bose and the company selling their products.  Without those small scale businesses, the large scale businesses would have trouble making money. This in turn would cause them to begin to go out of business, or in other words, start a global economic meltdown.  Now, this doesn’t happen with just consumer goods, it also happens with things such as coal trade, or crop trade.  The importance of every country differs based on their resources.  But, even those are reliant on small scale business. 

When it goes the other way around, a company such a Bose could lose a couple million dollars in a day and not twitch, but the impact that has on the small businesses that supply them could be catastrophic for those companies. Now, imagine if huge companies such as Exxon or Walmart or even Toyota were to have a huge loss in business, say 40% cut, the world would almost stop.  So many people, not just within the companies, but those of the small business world, would lose their jobs causing a huge depression.  The world isn’t ran on a global scale economically as is commonly thought, but on the small scale, local businesses.  Small business employs a very large majority of the world. If a board of directors, say 18 people, decide they are going to cut 40% of a company so they can make a profit, that would devastate millions and eventually turn around and backfire on that board of directors.

Bottom line is, the world doesn’t run on just small scale, or just large scale business and both have an effect on the global economic side of things.  True, one could cause far more issues than the other, but without stable global economics, both would become devastated.