Direct INVESTMENT has two meanings in business: the creation of a business enterprise in another country or direct transfer savings from households to businesses without the use of FINANCIAL INTERMEDIARIES. In its first meaning, direct investment is one alternative for a business considering expansion abroad. Direct investment is an alternative to either EXPORTING or LICENSING. It usually involves a larger and longer-term commitment of CAPITAL and resources than either of those two alternatives. Direct investment in foreign economies is typically done for any of three reasons. First, investment may be needed to extract or make use of raw materials. In the 1960s and 1970s, many U.S.-based oil and mining companies established facilities around the world to extract resources. Second, many MULTINATIONAL CORPORATIONs (MNCs) establish manufacturing facilities in countries to take advantage of less-expensive, trained labor resources. For example, MAQUILADORAS, the production-sharing factories in northern Mexico employ over a million workers at significantly lower cost than in the United States or Canada. In recent years, many U.S. computer companies invested in software development facilities in India to take advantage of a highly skilled, English-speaking workforce. Third, direct investment is often used as a means of overcoming TRADE BARRIERS protecting domestic industries. Production in a country, even by a foreign-owned company, is usually exempt from restrictions. In the 1980s, Japanese automobile manufacturers, fearing trade barriers, invested heavily in factories in the United States. Globally direct investment is dominated by the United States, Europe, and Japan. For a developing country, direct investment brings new technology and production capacity. It also provides access to management and marketing methods used in international trade. But FOREIGN INVESTMENT is made based on earning profits, which are withdrawn from the country, and foreign companies are often criticized for lack of respect for cultural values and for creating and leaving behind environmental damage. The second meaning of direct investment refers to direct interaction between lenders and borrowers. In the United States most savings are deposited with financial intermediaries, banks, CREDIT UNIONs, and SAVINGS AND LOAN ASSOCIATIONS, which then lend these funds to consumers and businesses. Financial intermediaries provide the benefits of aggregating funds, reducing risks through lending to multiple borrowers, and knowledge of sound lending practices. Like any business, financial intermediaries attempt to earn a profit for the services they provide. Since the 1980s, many U.S. financial intermediaries have experienced disintermediation: the withdrawal of funds by savers, who then directly purchase securities.