1.

​ Analyzing the role of international investment in International division of labor

The international division of labor (IDL) refers to the global allocation of production

activities, where different countries or regions specialize in particular tasks or stages of

production according to their comparative advantages. Traditionally, the IDL was defined by

developed countries focusing on manufacturing and technology, while developing countries

specialized in raw materials and low-cost labor. However, with the rise of international

investment, especially foreign direct investment (FDI), the nature of the IDL has evolved.

International investment has become a powerful mechanism reshaping how labor and

production are organized on a global scale.

One of the most important contributions of international investment to the IDL is the

formation of global value chains (GVCs). Multinational corporations (MNCs) invest abroad

to optimize production costs, gain access to resources, or enter new markets. By doing so,

they fragment production across borders: research and design may occur in advanced

economies, while assembly and labor-intensive processes take place in developing

economies.

Through FDI, capital flows to regions with abundant labor, cheaper costs, or natural

resources, thereby reinforcing those countries’ roles in the global division of labor. For

developing economies, this often means specializing in manufacturing or resource extraction,

while developed economies maintain dominance in high-value-added services, finance, and

innovation. Investment thus institutionalizes the labor division between the “Global North”

and “Global South,” but also creates opportunities for upgrading within GVCs.

FDI often brings modern technologies, managerial practices, and training. Such

spillovers allow some host countries to move beyond low-skill assembly into more complex

production roles. In Vietnam, for example, empirical research shows that domestic firms

benefit from vertical linkages with foreign firms via technology spillovers, which raise
productivity (Carol, 2015). However, horizontal spillovers (from foreign firms to local

competitors in the same industry) are sometimes weak or even negative, due to strong

competition (Hoi & Richard, 2011).

Despite the benefits, international investment can also perpetuate asymmetries. Many

developing countries remain in low-wage, labour-intensive segments of production, with

limited capture of profits or control over technology. In Vietnam, while FDI has raised labour

productivity, the technology transfer has often been modest and concentrated in processing

industries rather than high-value innovation. Government policies and domestic capacity

(skills, infrastructure, institutions) determine how much value is retained locally versus how

much leaks out.

The IDL is not static. As labour costs rise in one country, MNCs shift labour-intensive

production to cheaper locations. Southeast Asia (Vietnam, Cambodia, Bangladesh) is an

example where such shifts are ongoing. Meanwhile, some countries upgrade existing

facilities and capabilities, moving into higher-value tasks or services. FDI thus acts as a

mechanism not only for division of labour, but for continual re-division and upgrading.

International investment is a decisive force in shaping the International Division of

Labor. Through capital flows, GVCs, and technology spillovers it reorganizes global

production and redistributes labour tasks. While it offers opportunities for development, skills

acquisition, and economic growth, it also poses risks of dependency, inequality, and limited

value capture. For developing nations like Vietnam, the challenge is to craft policies and

build capacities that maximize the benefits and minimize the risks.

2.​ Analyzing the role of international investment in the process of globalisation

​ Globalization process refers to the phenomenon where organizations expand their

operations across borders to enhance their competitive potential by integrating into the global

economic environment. (Agile Manufacturing: The 21st Century Competitive Strategy,

its contributions to global value chains, development finance, technology & knowledge

transfer, and cultural integration.

​ One of the most visible impacts of international investment is the creation of global

value chains (GVCs). Foreign direct investment (FDI) by multinational corporations enables

firms to locate different stages of production in different countries. In this setup, international

investment doesn’t just follow trade—it organizes it by deciding where each task is done,

with deep implications for employment, technology, and market access across countries.

​ International investment serves as an important source of external finance for

developing countries. FDI provides relatively stable, long-term financing. It allows countries

with limited domestic savings to access resources for industrialization, infrastructure, and

market expansion. This role was particularly evident during 2013 – 2017, when developing

economies attracted over half of global FDI inflows (UNCTAD, World Investment Reports).

​ A distinctive feature of international investment is its role in promoting technology

diffusion and knowledge spillovers. Multinational enterprises bring advanced technologies,

managerial skills, and organizational practices to host economies. Over time, local firms

absorb these innovations, upgrading their capabilities and enhancing their

[Link] include East Asian economies such as South Korea and Singapore,

which transitioned from low-cost labor hubs to global innovation centers.

International investment also fosters cultural globalization. The expansion of

multinational corporations, such as McDonald’s, Starbucks, or Apple, reshapes consumer

preferences and lifestyles across diverse regions. These investments introduce global brands,

values, and consumption patterns, creating shared cultural references worldwide.

03.
 International investment in general and foreign direct investment (FDI) in particular

can create a big impact on career opportunities.

FDI can be considered as the largest external financing to developing countries. FDI

contributes to output and employment growth through its positive productivity and

technology transfers.

Increases in FDI can directly contribute to job growth. When multinational companies

invest in a country, building factories, offices, R&D centers, they create jobs in

manufacturing, services, technology and logistics. Also, infrastructure development such as

investment in opening roads, ports, bridges and digital expansion can directly increase job

opportunities in order to support these industries.

Not only bring tangible benefits but also raise employees' skills. Because of knowledge

and technology transfer, management practices from international firms, workers can upgrade

their skill and approach global standards. International investments increase demand for

high-skilled laborers like accountants, lawyers, IT professionals, marketers,... New career

chances come, stimulate people to improve their knowledge, talent,...

Employees can have opportunities to work in global operations, widen cross-border,

work with professional teams around the world, and find better jobs outside the country.

However, local workers must face the competitive pressure from foreign talent or

higher performance expectations from company and colleagues. They also need to keep

improving their skills to stay competitive because opportunities are only for who deserves.

At the same time, foreign investments open indirect opportunities for entrepreneurship.

Local businesses can become suppliers, service providers, or partners to international firms,

benefit from knowledge transfer and access to global markets. Investment in digital industries

also encourages remote work and freelancing, allowing individuals to serve international

clients without leaving their country.