International Business: Technology - Essay Example

International Business: Technology. The purpose of this assignment is to provide some insight as to one of the seven forces of globalization. The format that will be utilized for this assignment is to first introduce one of the seven forces of globalization and explain some of the recent trends in that particular field, followed by a kind of SWOT analysis to the international business and tensions between stakeholders. After this pint a brief discussion will be conducted on WEF and Davos (2010) followed by a critical discussion of Davos in which some alternative initiatives will be introduced. Lastly this paper will conclude with some recommendations to Governments and Companies on the effects that one of the seven forces of globalization will have on the nature of international business. The force of globalization that this paper will focus on will be ‘Technology’. It is the case that the term ‘technology is difficult to define. It remains an important theme for all scientific development; furthermore all of these advances lead to improvements in the business community and subsequent globalization. However there appears to be no real consensus on it meaning. According to Marx (1997) it is the case that the term has become associated with business, engineering, advancement but subsequently has also become associated with exclusionary forces directed towards women, laborers, and non-western people. For the purpose of this paper, technology will be defined according to dictionary.com (2010) in which it will refer to the branch of knowledge dedicated towards the development and implementation of technical means towards industrial arts, engineering, science and applied science. In this regard one can consider technology an important element of globalization. According to the International Chamber of Commerce (ICC, 2000) technology remains one of the most important drivers of globalization through such factors as greater efficiency through e-commerce, the internet (Which provides instantaneous delivery of information). This proves to be a serious factor for globalization insofar as the free flow of information has made many markets more competitive. Secondly a major technological innovation that has brought about serious globalization factors is the spread and development of computers themselves which have helped make improvements in production and distribution capacities help drive down major costs and as such increase efficiencies. Building on this point major technological advances in the telecoms sector makes communication much easier between foreign markets and as estimated by ICC(2000) the price of trans-Atlantic telephone calls have fallen over 90% from their prices approximately 20 years ago. The last major innovation that has affected globalization in recent times are the improvements in distribution networks (Specifically shipping). By integrating new navigational, communication, engine & hull design, and implementation of new shipping routes the transfer of goods across oceans has never been faster, cheaper or more efficient. According to Mussa (2000) by the end of the twentieth century the relative cost of shipping a ton of cargo across the Atlantic was approximately twenty percent of the original cost at the beginning of the century. This in turn has lead to the development of new markets and the expansion of many product lines into a range of nations that would otherwise not been able to significantly engage in trade. In terms of my actual opinion of the Davos (2010) conference I believe that in its origins the conference covered and discussed many important topics and lead to the implementation of a number of important policies however in recent years it seems as though less is getting done. On a personal level I really enjoyed Gowers (2010) opinion on the conference in which he postulated two charges against the conference which included that the conference has become celebrity obsessed and con no longer hold serious debate insofar as the 2009 banner was “Taking Responsibility for Tough Choices” however there were nearly no serious tradeoffs presented for managing climate change. The second charge is that Davos is starting to bow down to people who have spent so much trying to bring it down such as the anti-globalization movement by making lofty statements about improving problems whilst the primary role of the conference is to strengthen economic growth. I think that the conference has molded itself into a simple forum for networking and the bringing together of world political and business leaders. In regards to the world economic forum and the Davos 2010 conference, it is clear that a number of initiatives have been proposed for the purpose of improving technology and the implementation of new technologies in order to bolster economic growth as well as making some processes more efficient. According to Webber (2010) one of the major themes at this years Davos conference was in fact Technology, specifically how it is going to affect societies, government, companies and human behavior. So for the purpose of this paper the focus will be on these four elements. In regards to how technology is going to affect societies as espoused by new revelations at the Davos 2010 conference it has become abundantly clear that a big push for the coming years will be on green technologies and how the implementation of newer (More efficient) technologies is going to make a positive impact on our environment. According to Bennhold (2010) it was the case that in many developed nations a view of ‘Green technology’ was that there would be an economic tradeoff however a number of potential business case scenarios were presented at the conference that demonstrate that initiatives can be more friendly to the environment and make businesses more competitive. In a speech delivered at the conference it became clear that in the energy sector alone newer technologies (Such as wind a solar energy production) will have potential to support trillions of dollars in revenue and support over 20 million jobs globally. In the French context alone, these new green technologies have the potential to provide employment to over 240,000 people which can help to offset job losses during the global economic downturn. This is a trend that is not exclusively take up by the developed world, in fact it is the case that in China according to Bennhold (2010) in 2009 the country poured over U.S.$440 billion into clean energy technologies last year (Specifically improvements to nuclear power generation and renewable energy) and is expected to surpass Spain as the worlds third largest producer of power through wind power generation. In terms of how this will affect the greater society it is the case that a significant reduction in coal energy generation in China could have a profound impact on the respiratory health of the citizens in that nation. Furthermore, the nation has the potential to provide a new significant source of high paying employment for people within the nation. In regards to how the Davos 2010 conference has proposed technological changes that will impact companies it is clear that new proposed initiatives will change the economic environment in which we operate but also impact the effect that major companies participate. According to Spelman (2010) it is the case that business leaders are now more aware than ever about the importance of growth markets which makes the global environment arguable more competitive. It is the case that growth rates in these emerging markets is significantly higher than in established markets and as computing power accelerates and computer specific technologies such as mobile and collaborative computing has fundamentally changed the way in which companies communicate and collaborate. These factors working in conjunction with computing technologies that makes for the ability to process much larger amounts of data will arguable create new business opportunities in all regions. This will ultimately impact the companies and consumers in an increasingly global environment. How the Davos 2010 conference has proposed that technology will affect governments is a complex issue. As proposed by Werdiger (2010) it was proposed that new technologies will probably affect governments the most in regards to financial regulation. It has been argued that a lack of financial regulation was a major contributing factor to the global economic downturn and as such new regulatory technologies can be implemented to ensure that the strength of the financial markets can be kept in check. One such proposed measure is implementing new software initiatives to ensure that banks are able to better track and maintain a strong capital reserve to ensure that these institutions don’t default on future repayments. The significance of this is that thee new technologies in the hands of government regulators will ensure a more watchful eye on major financial institutions and hopefully will lead to a much smoother operation in the future. In terms of how the Davos conference proposes new technologies will affect general human behavior it could be argued that as operators within the general society all of the aforementioned technologies will affect all operators within our respective countries. However it remains the case that according to the WEC (2010) website it was postulated that people who use social networks are far less likely to know their neighbors however mobile phone users are more likely to form close friendship bonds than non-users. The implications for this is that as new technology spreads into emerging markets it will be the case that the traditional roles of community and society may be strongly modified. The implications for this are that people are going to interact with a greater variety of people on a more frequent basis than in previous decades. However the medium in which they choose to communicate will probably be in flux as newer technologies are introduced. In conclusion there are basically only a few recommendations I can make in regards to how international business will affect governments and companies. Firstly it is the case that there is a constant state of flux in terms of technological innovation so strong attention should be paid to ensuring that organizations stay as up to date as possible . For example it can be that a modern sales organization should incorporate smart phone technologies in order for its agents to stay in touch with their clients. However, special attention should be paid to ensure that new technology implementation is not made in haste to ensure that significant investment is not made into improvements that will not hold sway. In terms of how international business is going to affect governments, special attention should be paid to the changing global markets. It was the case that in previous decades many companies would write off developing countries as an afterthought however as anybody who engages in international business knows, emerging economies experience growth rates that far exceed that of established markets. References Bennhold, K. (2010) Race is On to Develop Green, Clean Technology. New York Times. [online] Available at http://www.nytimes.com/2010/01/30/business/global/30davos.html Accessed on February 26th 2010. Dictionary.com (2010) Definition: Technology [online] Available at http://dictionary.reference.com/browse/technology Accessed on February 26th 2010/ Gowers (2010) Davos: Beanfest of Pomp and Platitude. The Times Online [online] Available at http://business.timesonline.co.uk/tol/business/article716954.ece?token=null&offset=0&page=1 Accessed on February 26th 2010. ICC (2000) International Chamber of Commerce: Globalization and Information Technologies [online] Available at http://www.iccwbo.org/id1283/index.html Accessed on February 26th, 2010. Marx, L. (1997) Technology: The Emergence of a Hazardous Concept. Social Research (64) 965-88. Mussa, M (2000) Factors Driving Global Economic Integration. International Monetary Fund. (Speech delivered to the Federal Reserve Bank of Kansas City on ‘Global Opportunities and Challenges’). [online] Available at http://www.imf.org/external/np/speeches/2000/082500.htm Accessed on February 26th 2010. Spelman, M. (2010) Davos 2010: Business Leaders Need to learn New Skills. BBC News. [online] Available at http://news.bbc.co.uk/2/hi/business/8476023.stm Accessed on February 26th 2010. Webber, T. (2010) Davos 2010: No Glitz, No Politics, but Down to Business. BBC News. [online] Available at http://news.bbc.co.uk/2/hi/business/8490278.stm Accessed on February 26th 2010. Werdiger, J. (2010) In Davos, Bankers Look for Closer Bond with Policy Makers. New York Times. [online] Available at http://www.nytimes.com/2010/01/30/business/global/30bank.html accessed on February 26th 2010. World Economic Forum (2010) The Information Age and Human Behavior II [online] Available at http://www.weforum.org/en/events/AnnualMeeting2010/IntProgramme/index.htm?id=30073 Accessed on February 26th 2010. Read More