How has Technology Contributed to Globalisation

How has Technology Contributed to Globalisation

Keywords technology impact globalisation globalization of markets

Explain How Changes In Technology Have Contributed Towards Globalization Of Markets And Of Production

Technology has dramatically changed peoples way of life all over the world and the world today has become a true manifestation of a global village Not only the frequency of international travelling increased manifold but the possibilities of crossborder trading of goods and services have also increased exponentially These impacts are collectively known as globalization

Hill 2009 defines globalisation as a process which enables individuals organisations and governments from different natins to come across each other and interact in an intergative manner The end result of such intergation would be an intergated globalised market system which can act as a melting pot of indivual economies of different nations

There are two ways in which globalisation can be envisaged ie with the production perspective and thebmarket perspective Hill 2009 defines the markets globalisation as melting down and convergence of individually independent market places into an amalgamated market place Sharing of the sources of production from different geographical locations for levaraging the quality and cost of the goods and services produces is the idea behind the products globalisation Hill 2009

Many institutions have been formulated to help manage regulate and police the phenomena of globalization and to promote the establishment of transnational treaties for global trade A few are as following
The World Trade Organization WTO
The International Monetary Fund IMF
The World Bank
The United Nations UN

These institutions act on an international level to regulate and tackle any problems that the different countries companies and individual may face when undergoing globalization eg The IMF provides monetary services and acts as a last resort for the members in financial distress Gitman 2008

Now the question is how instead of what How does globalization happen What drives globalization There are many drivers or rather changes that result in globalization Generally there are two macro drivers of globalization These are the declining trade and investment barriers between countries and changes in technology

Organisations across the world now face lower level of obstacles to investing and trading in foreign lands This flexibility allows the firms to choose global locations where they have to spend minimum on production costs and reap maximum benefits in return by strategically locating their production site and service and product outlet locations Design can thus be created in one global location production at a second global site and the niche market can be a totally far off market at the other end of the world Globalisation of production thus exploits cheap labour in the third world markets and rich buyers in the first world markets Arribas 2009

The technological changes are not just limited to the automation of the production line but it also includes the advancement in infrastructure and connectivity The most important innovation has been the microprocessors The developments in communication technologies like wireless optic fibre satellite communications and the rapid growth of the internet have brought the global business to a previously unimagined level Improvements have also occurred in the field of transportation technology resulting in the development of commercial jet aircraft which has reduced the time for transit

Globalization is not only resulting from declining trade barriers or changes in technology but upon scrutinizing two other factors come into play These are Foreign Direct Investment FDI and increasing international trade

Globalization is not a straight line event rather it has been maturing from many decades and the implications of this phenomenon are being strongly felt now This has been going on since the 1960s In the 1960s the US domina

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