BE/U4 Topic 3 Impact of Technology on Globalization
Advancements in technology have considerably facilitated globalization. In fact technological progress has been one of the main forces driving globalization. Technological breakthroughs compel business enterprises to become global by increasing the economies of scale and the market size needed to break even.
Technological advancements reduce costs of transportation and communication across nations and thereby facilitate global sourcing of raw materials and other inputs. Patented technology encourages globalization as the firm owning the patent can exploit foreign markets without much competition.
Information technology has led to the emergence of the global village. For example, the World Wide Web has reduced the barriers of time and place in business dealings. Buyers and sellers can now make transactions at any time and any part of the globe. Technological change also affects investments.
Earlier, high technology production was limited to rich countries with high wages. Now technology is easily transferable to developing countries where high tech production can be combined with low wages. A large number of firms in advanced countries are now outsourcing labour intensive services from developing countries like India.
Technology has enabled globalization in almost every single facet. If you are interested in a great book on this there is one called “Connectography: Mapping the Future of Global Civilization”.
Technology is the vital force in the modern form of business globalization. Technology has revolutionized the global economy and has become critical competitive strategy. It has globalized the world, which drive all the countries to more ethical standards. This paper attempts to show how Technology revolution is sweeping the globe and the transition from manual to electronic delivery of services both in public and private sector leads to advancement of business community throughout the world.
Globalization has lead to new markets and information technology is one of the technologies fostered to the new market in this increasing competitive world. Technology has helped us in overcoming the major hurdles of globalization and international trade such as trade barrier, lack of common ethical standard, transportation cost and delay in information exchange, thereby changing the market place.
Technology has enabled the software experts to work collaboratively over the network with companies from around the world. The technological advancement has helped a lot in creation and growth of global market. Multinational Corporations (MNC) can be seen as a central actor in globalization. Markets have become global at a rapid pace, as indicated by several kinds of trade extended to foreign countries. The innovation in host country is often undertaken by MNC based in one country and due to the technological advancement MNC(s) have expanded to other countries by some kinds of FDI also facilitating the movement of research and development.
The researchers have analyzed that though the technology has globalized the business but economically well developed countries have been more benefited. While technology has created many opportunities for global networks of tasks it is important to look at the friction in the system to understand the limitations. The sources of friction are many and could bring the system to its knees. Companies and countries that want to thrive in this era of globalization will seek to mitigate the abuses, while dealing with the friction.