Modernization and Innovation of Trade Business

A nation possessing limited natural resources is able to produce and consume more than it otherwise could. The establishment of international trade expands the number of potential markets in which a country can sell its goods.

The increased international demand for goods translates into greater production and more extensive use of raw materials and labor, which in turn leads to growth in domestic employment. Competition from international trade can also force domestic firms to become more efficient through modernization and innovation.

Within each economy, the importance of foreign trade varies. Some nations export only to expand their domestic market or to aid economically depressed sectors within the home economy. Other nations depend on trade for a large part of their national income and to supply goods for domestic consumption.

In recent years foreign trade has also been viewed as a means to promote growth within a nation's economy. Developing countries and international organizations have increasingly emphasized such trade.