Role Technologies Play in Driving Processes of Globalization - Essay Example

Question Technologies Play A Role In Driving Processes Of Globalization. (a) Outline The Four Types Of Technological Change And Explain Briefly In Which Category Information And Communication Technology (ICT) Belongs Technology keeps on changing at an increasing rate every day. Today’s latest and best technology may become irrelevant and obsolete (Held et al, 2011). Accordingly, there have been four types of technological changes namely Incremental innovation, radical innovation, changes in a technological system and last but not least the changes of techno-economic paradigm (Held et al, 2011). The first technological change involved for example movement from use of the keypad to development of touchpad in mobile phones for examples, to ultra-modern laptops that are easy to carry. The second type of technological change that is radical innovation can be associated with the development of high speed magnetic levitation trains. The third technological change of changes in a technological system is more focused on research in science more so on genetics, mostly by pharmaceuticals while the fourth type of technological change of techno-economic paradigm can be associated with advancement in items such as steam power, electricity and ICT (Sassen, 2012). ICT mainly belong to the fourth type of technological change of techno-economic paradigm majorly because changes in ICT have brought about tremendous changes on how economic activities are conducted, changing the face of doing business on domestic Markets by introducing a paradigm shift to global oriented business operations (Sassen, 2012). (B) Critically Discuss The Argument That ICTs Shrink Time And Space Across The Globe. Bring Examples to Support Your Answer ICT has reduced the time and space in the globe in terms of providing a means of communication between buyers and sellers located in different parts of the globe. Jobs can be outsourced and products exported to foreign markets at short notice (Loebis & Schmitz, 2005). ICT provides input and output in the form of information on the market operating conditions, expectations from market players as well as negotiations. ICT has led to shrinking of time and space by providing the back bone of a 24 –hour global economy in which financial services across different markets worldwide are instantaneous. The financial services in a global perspective are not tied down to a physical location as information forms the main input and output (Loebis & Schmitz, 2005). ICTs have shrunk time and space across the globe by providing technologies that are digital and advanced and make communication between individuals in different parts of the globe instantaneous and seamless (Sassen, 2012). An example of this technology is voice over the internet protocols such as Skype. Computerization of financial services makes geographical location of financial capital less important. ICT continues to form the basis for business process outsourcing (BPO) as it provides the foundation for transfer of business functions such as call center management as well as payroll preparation (Loebis, & Schmitz,2005). Question 2 (a). Can Outsourcing Be The Basis Of Development And Growth For Countries Which Lie Outside The Established Global Processes Of Production? Outsourcing involves contracting of various forms of business functions to external vendors. This is necessary where a firm aims at cutting down on costs such as labor. Examples of business functions that can be outsourced include payroll preparation, billing, call center services and data entry among others. Global players in the outsourcing business include India, Israel and Ireland while countries such as china and Russia have exhibited signs potential growth in the outsourcing business (Linden, Kraeer & Dedrick, 2009). Whether outsourcing can be a foundation of development and growth for countries that lie outside the established global process of production, is hugely dependent on various factors such as the government's vision and policy, the human capital of the capital in terms of educational levels, language skills as well as the quantity and composition of this form of capital (Loebis, & Schmitz, 2005). Some of the factors challenging inclusion of developed countries in the global business of outsourcing include the fact that a slow moving technologically country cannot provide quality service to a fast growing high tech industry. (C) Under What Circumstances Can Countries Develop Their Outsourcing Services Industries? Countries can develop their outsourcing service industries through various factors such as government’s vision and policy aimed at creation of an enabling business environment for carrying out outsourcing (Sassen, 2012). The human capital in a country will influence how the outsourcing service industry is developed in terms of educational levels, language skills as well as the quantity and composition of this form of capital. Also of determinant to whether a country can develop its outsourcing industry is the quality of reward outsourcing provides to attract and reward the workforce. The wages offered by outsourcing firms are normally a tenth of what would be paid in developed countries. The structure of the industry, the capital committed to outsourcing firms as well as domestic and foreign demand will also determine if countries outside the established global process can base their growth (Kaplinsky, 2000). Some of the factors challenging inclusion of developed countries in the global business of outsourcing include the fact that a slow moving technologically country cannot provide quality service to a fast growing high tech industry (Kaplinsky, 2000). (D) Comment on the Argument That the Growth of Outsourcing Demonstrates the ‘Death Of Distance’ Outsourcing involves contracting business functions to external players usually abroad. These functions include data entry, call center management just to name a few. Global economies such as Russia, India, China and the US play a vital role in the advancement of the concept of globalization and reduction in distance. Globalization has reduced the cost of operations, increased efficiency and faster means of doing business which in relation to outsourcing demonstrates the death of distance between different global markets. Question 3 (A): How Do You Understand Regional Integration As Opposed To Globalization? Regional integration involves agreements between groups of countries that are located in a particular geographic region. The aim of integration is to minimize costs of doing business, remove tariff and non-tariff barriers and allow free flow of products as well as other factors of production such as labor, capital and technology in between these countries. Globalization refers to exchange of ideas, views and products on an international or worldwide plat form. It promotes the exchange of economic resources from different parts of the world, creating some form of dependence between regions. (B) Compare and Contrast Two Different Forms of Regional Integration Integration can be shallow or deep (Kaplinsky, 2000). Shallow integration is aimed at lowering the barriers to trade through liberation, bilateral agreements, as well as global negotiations under such institutions such as the World Trade Organization. Deep integration on the other hand is aimed at creating a common market place for goods and services (Kaplinsky, 2000). Deep integration harmonizes the market prices, legal standards, labor market and financial institutions involved (Kaplinsky, 2000). Deep integration achieves this by creating synergy between trade, productivity and growth. Some of the types of regional integration include; NAFTA and the European Union. Economic benefits of integration include specialization that allows for countries to focus on goods and services they produce best as well as creation of free trade that leads to innovation, competition and growth (Linden, Kraeer & Dedrick, 2009). Another benefit of integration is foreign direct investment in terms of technology, capital or otherwise. Integration has also political benefits such as enhanced cooperation politically. Grouped economies have greater influence in negotiations in global forums. Integration may also lead to economic independence and stability of a region. References Held, D., McGrew, A., Goldblatt, D and Perraton, J. 2011.Global transformations: Politics, economics and culture, Cambridge, Polity Press. Linden, G., Kraeer, K. L. and Dedrick, J. 2009 .Who captures value in a global innovation Network? The case of Apple’s iPod. Communications of the ACM, 52(3), pp.140--?144 Loebis, L and Schmitz, H. 2005. Java furniture makers: Globalization winners or losers? Development in Practice 15(3--?4), pp.514--?521. Kaplinsky, R. 2000.Globalisation and unequalisation: What can be learned from value chain analysis? Journal of Development Studies. Sassen,S. 2012. Cities in a world economy.4thed. Sage Publications, PineForge Press, Los Angeles, London. Skeldon, R. 2009. "Of skilled migration, brain drains and policy responses." International Migration 47(4): 3--?29. United Nations Development Programme. 2001. Making new technologies work for human development. United Nations Development Programme. Wade, R. H. 2004. "Is globalization reducing poverty and inequality?" World Development 32(4): 567--?589 Read More