Globalization in the next ten years
Globalization is the growing interconnectedness, based on information technology, that resulting in the flows of capital, information, products, services, and people throughout the world. It is a powerful force that impact almost every countries, events, and economies in this 21st century.
When business is no longer restricted to a country or a region but can expand globally, it can grow faster, larger and prosper. Based on some estimates, a typical global business can grow about 80 times bigger and revenues could be at least 50 times more than today. With global business, the standard monetary measurement will be in billions and trillions dollars, not hundred thousands or millions as today. That is why so many companies are quickly move and expand their business all over the world to seize this opportunity. As they expand they must operate at 24 hours and 7 days because a night in one place is a morning in another; a weekend in one place is workday in other. Business transaction is no longer use paper but electronically through the internet, therefore the speed of business will happen at internet speed. To grow bigger, large companies will buy smaller ones and consolidate their global power. That is why in past years, the trend of company acquisition is happening all over the world.
To survive and be successful, business must operate at the most efficiency and effective. They must maintain low cost structure to reserve capital to defense themselves against competitors. They must continuously review and re-evaluate their process to reduce waste. They must adopt a differentiated approach to achieve customer satisfaction. This is why information technology is becoming a strategic factor in global business. Information Technology (IT) is the “bloodstream” that conduct the flow of capital, goods, and services. It can be automated to conduct business faster rather than having it operate by people. It can reduce bureaucracy and redundancy. It can store and retrieve data faster and more efficiency. It allows company to set control to eliminate errors and track activities correctly. Because the potential of IT and its benefits, all companies, large and small, must apply IT and therefore create high demand for skilled IT workers.
Of course, during the transition to globalization there will be cyclical economic ups and downs. There will be periodic financial or other crises, but this growth will continue. Most countries around the world, both developed and developing, will benefit from gains in the global economy. However, the greatest benefits of globalization will happen to countries and to company that can adopt new information technologies faster and better. A country's level of technological achievement and adoption is defined by its investment in technology education and its ability to integrate and apply the available technologies to its economy. Failing to do that can push the country back many years as others are fast moving forward.
With globalization, there is a two-way flow between the developing and the developed countries. Skilled workers will work in places where they can prosper the most. In the past twenty years, there is a “Brain-drain” phenomena where skilled workers were relocated from developing to developed countries for better opportunities. At the same time, efforts by global companies to expand their operations to lower cost countries will foster the spread of old, archaic manufacturing facilities from developed to developing countries. It helps low skilled workers to get jobs in highly polluted, contaminated area but with lower wages, there will not much benefit to the economy in a long terms. It also brings more health problems and could destroy agriculture lands to grow food crops because of pollutions.
The investment in technology education has brought many high-tech breakthroughs in area such as Biotechnology with genetically modified organisms and increased food crops production. This new field is fast advancing to finding ways to slow down the process of food spoilage, advance genetic engineering, adapting organisms to clean up contaminated places etc. For example, the oil-spill has been one of the biggest issues in the environment but by genetically modify genomes, biotech-scientists have developed an oil-eating bacteria that could eat oil spillage, which lead to faster, more efficient ways to clean up oil spills. By genetically re-engineer the immune system cells, biotech-scientists have created tumor-seeking immune cells to locate and attack dangerous cancer cells. By modify the tobacco cells genetically, biotech-scientists have found a way to increase the oil in tobacco plant to be used as bio-fuel for cars and machinery, instead of oil and make some countries less dependent on oil production. Biotechnology is being applied to health fields develop effective treatments for many diseases. To date, there are over thousand of genetically modified food crops with has significant high yields that could eliminating the threat of starvation in the world and improve basic quality of life for poor countries.
However, with globalization the gap between the “educated” and “uneducated” will continue to widen unless some countries pursue new policies to improve their education systems, focusing more in technology so that it can support the adoption and application of new technologies into their economy. Those countries that pursue such policies could leapfrog phases of development, skipping over phases that other developed countries such as the U.S. and Europe had to go through in order to advance. The tradition progress is the movement from agriculture phase to manufacturing phase then technology phase but it is possible to move quickly from agriculture phase to technology phase, skipping the manufacturing phases. The only way to do that is to invest in education with the focus on technology. India, an agricultural country already did it and become a highly advanced technological country today. China has made a stumble during the past ten years by focusing on the manufacturing but now has quickly re-focus its education system toward technology. Both of these countries are well positioned to become technology leaders. I believe even the poorest countries could be able to leverage technology to advance themselves and find positions in the global world if they invest in the education of their people.
The expected next revolution in high technology will involve the advancement in biotechnology, information technology and materials science. Many developed countries are investing heavily in research in these fields and are well placed to be leaders in a these fields. Currently, the U.S. is still in a position to retain its leadership, although it will have to compete with other countries in Asia such as Japan, Korea and China to retain its edge.
As more companies become global, their operating in the world will be more diverse. There will time where country affiliation will no longer a factor. They are all global companies, outside the control of any one country. They will be agents of change in dispersing business and technology widely, further integrating the world economy. An expanding global economy will be heavily dependent on technology, it will increase demand for more technology skilled workers, much more than ever.
Sources
- Blogs of Prof. John Vu, Carnegie Mellon University
