5.2.8 Technology

Why has globalization expanded so rapidly in recent times?


Connected by technology: In the first unit of this course, you considered the ways in which people around the world have become connected:

  • improvements in technology during the
    Industrial Revolution
    the period of major technological, economic, and cultural change in the late 18th and early 19th centuries resulting from the replacement of economies based on manual labour by economies dominated by industry and machines
    Industrial Revolution

  • the creation of more products
  • the need to sell products in other countries
  • the realization that raw materials could be purchased for a better price in other countries

    Because nations could communicate with each other and transport goods more easily, they were able to set up colonies and build international relationships. Although economics has been the main force that has pushed us toward globalization, technology has made it possible.

Rapid advances in technology have contributed immeasurably to our global connections.

Transportation technology: Technology allows corporations to move their goods from the place they are grown or made to their market. Because of
specialization
the assumption by workers or involved individuals of various tasks and roles to increase efficiency and output as well as to reduce costs
specialization, the components of many manufactured goods can come from various places, be assembled in another locations, shipped to a central depot, and then shipped all over the world. This form of production, either through
off-shoring
the relocation one function of a business to another country

For example, Ikea manufactures lamps at its factory in China.

Off-shoring differs from outsourcingbecause the operation is still managed by the corporation; in outsourcing, another firm is used to complete the task required.
off-shoring or
outsourcing
the business practice of moving the production of a good or service from a central plant or facility in the home country to another location; also called contracting out

It often involves transferring jobs to another country, either by hiring local subcontractors or building facilities in areas where labour is inexpensive.

For example, outsourcing occurs when Ford and GM close automobile parts factories in Canada or the United States and open new plants in Mexico, or when Walmart hires a Chinese firm to make all its bicycles, or Nike contracts its clothing from a garment factory in Bangladesh.
outsourcing that requires chains of networked producers and consumers is called
supply chain
a coordinated system of organizations, people, activities, information, and resources that moves a product or service from the supplier to the customer
supply chain production.


Cargo ship

Source: Wmeinhart

 



Size and scale are other factors in the expansion of globalization. Large corporations can operate with
economy of scale
in industrial production, the idea that bigger is better

In many industries, as output increases, the average cost of each unit produced becomes lower. Fixed costs can be spread over more units. However, increasing industrial size can increase average costs (diseconomies of scale) because managing large operations is more difficult and more expensive.
economies of scale. In other words, because they sell more products, they can sell them for lower prices.

One size fits all: Your family may have purchased a piece of furniture from Ikea. This Swedish manufacturer revolutionized furniture sales by shipping the pieces unassembled in flat boxes, saving transportation costs - and giving the customer an exercise in following instructions! Ikea's instructions are largely in pictures, so translation into numerous languages is unnecessary. Ikea and other transnationals manufacture products all around the world. Ikea's products are always changing, bringing new designs to consumers. Its store openings are always the same - a traditional Swedish breakfast and a log sawing demonstration in honour of its roots. Its stores all look the same, selling the same products in Edmonton, St. Petersburg, or Shanghai.

Developments in the communications media have contributed to the expansion of globalization. Telegraphs, telephones, and radio broadcasts began in the 1800s and early 1900s, allowing people to communicate more easily across borders. Television, then satellite television, and the Internet enabled further the sharing of information and culture. This flow of information has led to a push for democracy in many parts of the world. It allows people in the Middle East to see what is happening in wartime. It shows everyone what is happening when disaster strikes. It keeps everyone up-to-date with the latest trends.

The media and freedom of information: The instant communication made possible by satellites and the Internet has caused countries and international organizations throughout the world to react more quickly and sometimes more honestly. Once upon a time, the government could hide easily what was happening in others part of the world, but such information control is increasingly difficult. A government can attempt to block certain sites on the Internet or outlaw them completely, but that is very difficult and impractical. If its citizens want to know what is happening outside its borders, a government can do very little to stop them.

The Internet: The Internet connects people everywhere, allowing them to communicate with each other, to create and share information and entertainment, and to build networks and communities. The Internet is a great tool for business, allowing for the rapid exchange of money, information, and ideas. It is used for education, enabling students to learn "anywhere, anytime".

digital divide
the gap between those with access to digital technology and those without access
The Digital Divide is the gap in access to technology between rich and poor. The rich have greater access to information, education, and jobs. The digital divide occurs in communities, cities, and nations.

The Global Digital Divide is the gap between nations with effective access to technology and those without. Nations that invest in communications technology (
acculturation
...
ICT) profit while those without it struggle.

Challenges and Opportunities of Technology

  • Culture: Technology provides people all over the world access to the same forms of entertainment, the same news, and the same products. A tribesman in the hills of Vietnam can watch Hockey Night in Canada on his satellite TV and a Peruvian villager can hear the latest world news over the Internet. A woman in rural India can connect with a doctor by way of a monitor that feeds her basic health information and she can receive information vital to good prenatal care. Technology can help provide more equal opportunity. However, when that tribesman loses his own language in favour of English, or the Peruvian villager loses touch with news in his own part of the world,
    acculturation
    How one culture changes when it is affected by another. As societies interact, they absorb some of the aspects of other cultures and change as a result. Individuals are acculturated when their roles and behaviour change due to the influence of another culture.
    acculturation is happening.

  • Employment: Jobs that can be completed with technology can go wherever incomes are low. That your doctor e-mails your x-ray to Bangalore for an Indian doctor to diagnose an injury is great for Indian employment, but it may not be so good for employment in your home community.

  • Values: Transnationals such as Ikea and Wal-Mart present both a challenge and an opportunity for the places in which they do business. They bring jobs, but they also threaten smaller local companies. Because they produce low-cost items, they contribute to a throw-away society that could have a negative effect on the environment. You will look at that issue in the next unit.

Watch

View this TEDTalk on the digital divide.




Reflect


Does technology lead to greater prosperity for all?

  • Between 1984 to 1991, more than 1 million jobs were created in Canada. More than half of those jobs were in the high tech sector; fewer than half were in low and medium technology jobs.

  • In India, business process outsourcing and the technology sector account for 2.5 million jobs, which has contributed greatly to economic growth. However, that growth is not shared evenly.