Internationalization of Production

the process of establishing production relations between enterprises of different countries whereby the production of a country increasingly becomes a part of the world production process.

Internationalization of production arises in the epoch of developed industrial capitalism and becomes further developed under imperialism. The process has become particularly intense under the influence of the scientific and technical revolution. In the first stages, internationalization of production developed almost exclusively as an intersectorial international specialization. Further expansion of internationalization of production is linked with the emergence of various forms of intrasectorial specialization: the international specialization of individual sectors in a product (for example, the specialization of large firms of the USA, Great Britain, West Germany, and Japan in the production of certain types of equipment); the production of articles of a specific type and size (for example, tractor assembly in the USA specializes in the production of the most powerful wheeled and caterpillar tractors, Great Britain specializes in medium-sized wheeled tractors, and West Germany specializes in low-powered tractors); component specialization of factories of various countries in the output of articles, units, or parts for assembly; and technological specialization of enterprises of various countries in carrying out prescribed types of work.

Internationalization of production also takes the form of internationalization of scientific and technical research. Here, companies of different countries join to carry out one or another form of scientific or design work. There also is specialization of individual countries in one or another form of scientific research.

Internationalization of production under capitalist conditions is the basis of internationalization of capital. The development of internationalization of production is also manifested in the formation of international economic organizations in various fields of production, transportation, and communications, as well as in the fields of international trade and finance.

Internationalization of production in capitalist society is a dual and contradictory process. On one side, it strengthens the social nature of production. On the other, it sharpens contradictions between such production and the capitalist form of appropriation.

Under socialism the development of internationalization of production is carried out foremost as the planned formation of the international socialist division of labor. International specialization and cooperation, taking shape on the basis of coordination of the economic plans of the socialist countries, lead to the establishment of close and firm economic links among the countries of the socialist community.

Under socialism, internationalization of production emerges as various forms of cooperation between countries, including joint creation of various production rnits, construction of international transport links (for example, the Druzhba oil pipeline), and unification of the energy systems of a number of countries. The emergence of international production organizations of the socialist countries, such as Intermetall and Intransmash, contributes to the expansion of internationalization of the economic life of the socialist countries.

The development of internationalization of production in contemporary conditions is becoming an important factor in raising the efficiency of social production.