Globalization of Technology

Thirty-five years back, i.e., 1987, Washington DC played host to the Sixth Convocation of the Council of Academics of Engineering and Technological Sciences. One of the papers compiled from this gathering had this to say about globalization. The paper essentially provided thoughts on globalization's implications for the future too.

The key problems of society today are rarely categorized by governments as problems of science and technology. They are assumed to be social-economic-political problems, such as avoiding war, building the economy, curbing terrorism, fighting poverty and disease, or preserving a healthful environment. We can predict, however, that it will become clear that all social-economic-political issues intersect and that issues of technological advance are right in the middle of every intersection, sometimes causing the problems, more often offering possibilities for their solutions, and frequently providing opportunities for the world society to rise to new, higher levels of productivity, satisfaction, and happiness.

At present we see that the impact of advancing technology on the social-economic-political framework of the entire globe is growing rapidly, yet its implications are far from being adequately explored. Moreover, the effects of technological change are underestimated as short-range; crisis-dominated problems monopolize the attention of most of the world’s leaders. A severe mismatch is developing between accelerating technological advance and lagging social progress.

Thus, advances in information technology provide computer systems that can alter productivity and employment patterns to a much greater degree than the passing of new minimum wage laws can. Broadened global communications and transportation, resulting from technological breakthroughs, can speed up and link the world’s operations far more than trade pacts can.

Authored by Simon Ramo, an American Engineer, these lines are surprisingly relevant to date for a discourse. The lines become relevant considering the premises of how technology-driven globalization created the connected and interdependent world that we live in today. However, it is technology again underpinning the emergence of relocalization, shifting the supply chains closer to the regions where the products are expected to be consumed or used immediately or eventually.

Advancements in technology brought down the costs of moving goods, the costs of moving ideas and transferring knowledge, and the costs of remote access and usage of services.

Let us digress and bring some gathering around technology and globalization played to the advantage of each other. Firstly, technology brought down the costs of moving goods through the invention of the steam engine and additional modes, essentially translating to reducing travel costs too. Even the standardization of shipping containers helped this cause further through the 1900s. Many such aspects continuously dropped the costs of moving goods and traveling. These cost reductions ensured that people were now not confined to their regions or countries; instead, they could move to different ones. This movement led to various new settlements, industrial or manufacturing hubs, students studying abroad, etc. Secondly, technology brought down the costs of communication and knowledge transfer. Yes, the printing press and telephones revolutionized how we consumed information and communication with each other. However, the emergence and advancements of ICT (information and communication technology) dramatically metamorphosized how ideas and knowledge moved and were transferred or exchanged and how we communicated with each other. You can think about the advent of the Internet 1.0 and 2.0, and smartphones for a premise. And lastly, the technology currently is also bringing down costs of how we interact with people and access services remotely from any part of the world. Emerging technologies such as cloud technologies, artificial intelligence, 3D printing, and the Internet of Things are driving these reductions. It is the last set of cost reductions that are ushering in the ages of relocalization.

Essentially with the advancements of technology, wherein a technology or group of technologies are driving the emergence of new technologies, the global economic structure created unprecedented shifts. The shifts are in the way businesses/companies and countries organize or put together activities such as manufacturing or production, trading goods and services, investing capital, formulating strategies, and developing new products and services. Technology has created interdependencies among firms and countries. Private companies or enterprises have become the principal instruments in most countries to be prescient of the current state of science and technology, understand and predict the needs of the people and marketplaces, and then develop technologies, products, and services catering to those very needs. Add to this, the breadth of technological applications is extending at a never-before-seen-before rate. Technology itself is becoming more scientific with increasing investments in R&D and technologies evolving to drive or create more technologies. The more information or ideas are created and shared among people, companies, and countries, and the more the ability of these entities to absorb and develop on them, the faster the rate of innovation and development of new technologies. There is also the need for the companies to recoup their R&D investments, access more marketplaces, and continuously increase their revenues, which encourages or pushes them to expand internationally and help diffuse or disseminate technology. This aspect is particularly true in the case of information technologies, with the advent of Internet 2.0, cloud technologies, artificial intelligence, and advancements in semiconductor technologies. Companies and countries have established arrangements with other countries to access their marketplaces and also to promote technology transfer. This movement of information and technology capabilities has created dependencies, although this has helped rapidly evolve technologies and create new ones. However, this movement of information and access to technologies or products and services faces friction, owing to the effort of the governments to set the direction for technology to protect their countries' competitive positions and maintain national security. This could reduce the global sharing of technologies, products, services, ideas, and knowledge, which may lead to the slowing down of innovation and the development of new technologies.