Technology has tremendously impacted on business affecting both markets and production in ways that was not anticipated. The impact of technology can be felt in all aspects of businesses, right from the supply chain to sales and marketing. It is arguable that in the absence of technology globalization would not have taken traction as fast as it has. In other words, the success of globalization can be tied to the emergence of technology that has literally reduced the world to a small village. This paper approaches the discourse in two limbs. First, it extols the contribution of technology to globalization of markets and product. Further, this paper examines whether globalization would be possible in the absence of technological changes. With the benefit of hindsight and experience, this paper asserts that, technology has contributed substantially to globalization and absent technology; no globalization would still be theoretical subject.
Businesses operate successfully in the presence of conducive markets and factories. This calls for a proper infrastructure. Infrastructure has various facets. It is manifested in communication, transport, manufacturing, warehousing, among others. Today, all these facets of infrastructure have been affected by technological changes. The current applications inevitably apply the use of technological features and advances. It is imperative to relate these infrastructural facets to globalization so as to appreciate the role of technology in globalization. This puts forth the question what is globalization?
Globalization originates from the world globe. It refers to the integrated approach in production and markets in which the entire world operates like a small integrated village. Through globalization, businesses can operate without limitations to national boundaries. Globalization entail both production overseas, as well as export of production overseas. It can, therefore, be defined as the integrated exchange of ideas, products and labour at international level. Globalization has thrived because of the technological changes in the infrastructural facets.
The most affected facet is the communications system. The introduction of the internet system has effectively improved communication. One no longer has to rely on the postal method of communication. Communication remains one fundamental element in globalization. This is because for the facilitation of movement of goods and people, communication must take place often between three parties. That is, the sender, the recipient and the messenger. Previously, globalization was significantly impeded by the enormous miles one had to cover to transfer a message from one point to the other. The large distances often meant more time. It is popularly accepted that time is money. The long durations for communication resulted into slow decision making and in other cases avoidance of business in fear of possible communication lapse. Today, with the internet, markets have been expanded across continental shelves. A buyer who is Europe can easily communicate to his suppliers in Africa. This facilitated communication is not only faster, but also efficient and subjected to lesser distortion.
The transport facet has also been affected by technological changes. For instance, before the onset of air traffic, most of the movements were through the waters. This was time consuming and wasteful. It was expensive to ferry goods across continents. However, it should not be lost on us that “traditional” globalization was existent and international trade even involved slaves. These trade systems were, however, rout with poor transport system that posed obstacles to its success. In addition, the use of the waters caused several accidents that led to the loss of property and lives. Today, technology has improved transport systems substantially. People are subjected to a number of options. One could decide to use road transport, air, or water. The water transport has been radically improved ensuring the security and improving speeds effectively. This has facilitated globalization in two significant ways. One, manufacturing companies have opted to locate their factories overseas where the cost of production in terms of labour, energy, raw materials, among other costs, are lowest. The produced goods have then had to be transported to the markets, which happen to be spread all over the world.
On the other hand, the facilitated transportation has effectively enabled distribution of goods across the international markets. This has led to the application of the trade system based on competitive advantage. Under competitive advantage, countries or regions specialise in the production of goods in which they incur the lowest production costs. As such, production is in surplus. The excess which the country cannot consume, is exported in exchange for goods which it would have otherwise incurred high production costs. This concept facilitates specialization and international trade. It would not be possible without technological improvements in the transport facet. Take for instance, the export of perishables such as flowers and most horticultural products. It is technology that allows for the airlifting of the perishables within hours across several kilometres say between Amsterdam, Netherlands and Naivasha, Kenya.
The production facet cannot be overlooked in any discourse on technology. Improved technology has and continues to produce machinery that simulates production process. With the passage of time, standardization has become more and more precise. One could ask how this has led to globalization. In this current era, every business unit is determined to cut costs. Mechanization not only achieves standardization, but also reduces costs of production through savings in forgone labour costs and minimal wastages incurred. Through the use of computer technologies, manufacturers have come up with suburb designs and tailor made products that have high demands in the entire worldwide market. This has necessitated globalization.
Finally, one needs to look at the redefined nature of the information age. The technological advances within the education sector has vastly facilitated the spread and modes of education and knowledge. Today, ideas and concepts are easily communicated and shared on the worldwide web. The spread and communication of information through the internet has fundamentally facilitated globalization. This is because the spread of information in the competitive market has everyone desiring the best at the least price. The resultant effect is a surge in the demand for the best commodities available in the international market. This comes down to increased globalization of local markets.
Having discussed the contribution of technology to globalization, this paper will interrogate whether globalization of production and markets would have been possible in the absence of technological changes. Indeed, with absence in technological changes, globalization would still be a theoretical concept. This is because the fulcrum of globalization is the technological changes. Consider, for instance, the internet services in communications. Today, people can communicate through emails or other enhanced video and audio methods. It is the contention of this paper that communication informs the foundation of trade and by extension globalization. For market players, buyers and sellers, to interact, they have to communicate. The communication must make sense and facilitate agreement within a reasonable time. This has only been enabled through technological advances such as emailing systems, teleconferencing and video conferencing. The ancient method of letters would not have facilitated globalization to the extent seen in the modern world.
One could also examine the transport industry and the advances associated with technology. In fact, today, the electric train system is fast replacing the old steam engines which took days and months to arrive at destinations. The increased speeds have significantly facilitated globalized markets. Without the transport infrastructure, most commodities would have been limited to a given area of their production. The noble concept of competitive advantages would have not been practical. It should be appreciated then that indeed technological changes are responsible for the globalized world.
Finally, one should reconcile the globalized world to the technological applications in order to appreciate the role of technology in facilitating globalization. Today, several markets are based online. In that strain, consumers simply place orders from the confines of their rooms and offices. They are able to pay fees through internet money, a paperless currency system. Delivery is then effected. Additionally, the fact that international firms are on the increase attests to the spread of globalization. Further, the fact that firms choose to engage their customer mainly through the internet services shows that technological changes remain the fulcrum of globalization. Consequently, we indeed to embrace technological changes as they hold the future to business operations.
References
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