Morin Factory

Topic Chosen: Economic Growth

Economic growth refers to the increase in the real output of an economy. It is measured by the 2 main economic indicators, GDP per capita or HDI (Human Development Index). GDP per capita measures the total output of an economy in terms of money to the working population of that economy to get the general average of earnings of the people. As the economy grows, people would earn more for their works and thus, will raise the general earnings of the society which will be indicated by the rise of GDP per capita. On the other hand, HDI measures the living standards of the society. A society enjoying high living standards will be better educated and healthier than those with lower living standards. An educated and healthy workforce will be significantly more productive than one that is neither educated nor healthy. A highly productive workforce supports economic growth and so, the economy grows in response. And with economic growth, people will earn more and they will then be able to provide better education and health care for their families, companies may earn more profit and government would have better funding source. Both the society and government will enjoy the benefits.

What role does the Morin Factory play in increasing the economic growth of the Indonesian Economy, then? Factories like the Morin Factory has played many vital roles for the economic growth of the Indonesian economy, this includes increasing the national GDP by the income they generate and their products.  The income generated by Morin is included in the national GDP. And since Morin Factory mass produces their product, Morin raises the national GDP significantly. Moreover, Morin is the market leader in the jam spread market. This means that no or little proportion of their total product becomes a waste, most of their products are sold. Therefore, Morin generates a lot of income which is beneficial for both the company itself and the national economy.

As well as rising GDP, Morin Factory also helped the economy by employing the local workforce. Unemployment in the region decreases as Morin Factory gathers all the workforces they needed, the demand for labor increases as a result and unemployment declines. By this, Morin Factory has already helped the government with another economic aim, which is a low unemployment rate. In addition, by employing the local workforce, the local workforce can learn new things such as new technologies and new production processes. They may receive trainings and guidance from the company which will improve the education of the local people. All in all, the government receives benefits from companies like Morin as the unemployment rate declines and their workforce became more educated.

On the other hand, companies like the Morin Factory may cause some problems as well. Morin produces jam spreads, which is a food product; therefore they need to keep all the products they sent to distributors in good condition. If a batch of products should fail, the false goods are burnt along with their glass jars. This causes air pollution as well as ground pollution. The smoke from the burning materials may also be harmful for the local society. Diseases may spread, and the local society suffers as a result.

Aside from the burning process, the production waste of factories, like Morin Factory, may also be extremely harmful. If these waste are not taken care of properly, the water may be polluted, it may even reach the local water source. Properly disposing factories wastes can be very expensive and companies may be reluctant to carry out the procedures as it would increase their costs and reduce their profits. If the local water source is affected, the whole region may suffer. These effects may reduce the overall health of the society and reduce living standards. Unhealthy workforce leads to ineffective production and decreasing labor productivity. In effective and decreasing labor productivity will then result to declining economic growth.

In conclusion, firms such as the Morin Factory may help support the economy and economic growth as well as economic development but they may also cause some severe problems for the government if not managed or monitored properly. Morin has helped the government by supporting economic growth, reducing unemployment and educating current workforce about the newest technologies and production practices. But, Morin may have contributed to the local pollution problem and this decreases the living standards as well as overall health which lead to a decline in economic growth and economic development. However, if these problems are taken care of properly, they can be solved or even avoided. 

By: Jennifer M (9 Business/06)