According to the Organisation for Economic Cooperation and Development (OECD) globalisation is defined as: an increasing internationalization of markets for goods and services, the means of production, financial systems, competition, corporations, technology and industries.
Information technology was necessary to enable globalisation and this technology emerged from developed countries. It changed the economic relationship between countries because it made knowledge an increasingly important component in the production of goods and services. Knowledge and high tech industries are the fastest growing in the world today and for countries to compete in these sectors they need to invest substantially in education and training. This is easier for some countries than others.
Technology has typically been introduced to developing countries by large multi-national companies doing business there and so the technology used has originated in developed countries, where most of these companies’ research and development takes place. Many argue that this is increasing the power of the MNCs in international markets and weakening the bargaining power of developing countries.
Technology has also enabled the world to become more interconnected, beyond the economic sphere, with greater access to information and communication which is having a profound impact on societies. The International Labour Organisation has the following view:
“The industrialized countries were the source of the technological revolution that facilitated globalization but that revolution has also had ripple effects on the rest of the global economy. At one level, the new technology changed international comparative advantage by making knowledge an important factor of production. The knowledge-intensive and high-tech industries are the fastest growing sectors in the global economy and successful economic development will eventually require that countries become able to enter and compete in these sectors. This implies that they will have to emphasize investments in education, training and the diffusion of knowledge.”
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References: Dahlman, C. (2014). Industrial Development for the 21st Century. Technology, globalization, and international competitiveness: Challenges for developing countries. Retrieved from http://www.un.org/esa/sustdev/publications/industrial_development/1_2.pdf…
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