When firms conduct business in foreign countries, there is normally a transfer of technology . The transfer of technology may require local employees to receive sophisticated training to operate the technology. These training opportunities are likely to provide increased long-term earning power of employees in the local community. To create wealth. As employees earn paychecks, they buy a variety of goods and services, which creates local wealth.
Employees buy housing, insurance, a variety of financial and investment services, and many goods.
Vendors of these goods and services experience increased revenue and are likely to hire additional employees to meet local needs. To prevent brain drain. A brain drain references a situation where local citizens are able to find employment locally. If jobs do not exist locally, these employees or potential employees will relocate, and the community loses the increased wealth on a long-term basis. The Role of Risk and Return Risk plays an important role in any business environment.