Emerging Technology

This section emphasises on the emerging technology as a result of globalisation. Given below are the emerging technologies:

1. You must understand that by signing the WTO over 150 nations agreed to either decrease or to eliminate tariffs and to remove non-tariff barriers. This led to a free flow of factors of production that is machines, capital, labour, and raw material. Therefore, the world is becoming borderless as far as trade is involved and organisations have wide opportunities with relation to new market, new sources of raw material and human resource and capital.

2. While the speed of eliminating trade barriers is slow at the WTO and confronts various bottlenecks at several times, regional groupings have attained remarkable success in not only in decreasing tariff internationally, but in removing them at least at the regional level.

There are no trade barriers in NAFTA countries Canada, USA, and Mexico. The EU has gone one step ahead and introduced a single currency, the Euro, which is adopted in most EU nations. ASEAN is also removing their trade barriers. There is all likelihood that in few years, whole world will be segregated into few regional economic groups.

3. Multinational Corporations — It has been said that the Multinational Corporation (MNC) is the most powerful institution in the world today. Certainly, the process of globalisation, which is radically changing our world, is greatly driven by the rapid growth and spread of corporations.

Since the end of the Cold War in 1991, almost all nations in the world have decreased the role of the condition in the economy and decreased barriers to the international movement of goods, capital, services, ideas and technology. As the walls levied by nations/states have crumbled, multinational corporations have flourished, spreading across the world in search of new markets as well as factors of production. MNCs have spread across national borders in two manners: trade and Foreign Direct Investment (FDI). Each has spent to stable, lasting advantages to the world economy.

The rising power of the multinational corporation (MNC) is beyond doubt. The production of MNCs amounts to roughly one-quarter of the world’s output. Fifty-one of the world’s largest 100 economies are corporations, not countries. The entire value of foreign sales of MNCs now surpasses world exports of goods and services, and intra-firm trade by MNCs alone explains for nearly one-third of world trade.

There are now roughly 63,000 multinational corporations – described as firms that involve in international production – with more than 690,000 foreign affiliates. In 1997, these firms regulated $12 trillion in foreign assets, hired 30 million workers and earned $9.5 trillion in revenues – greater than the annual GDP of the United States or the European Union (EU). The rapid growth of MNCs is a direct outcome of the worldwide liberalisation of trade and investment. Corporations have grown larger as they now compete in much larger markets.

4. The close of the cold war and a paradigm shift in erstwhile socialist countries also brought vital changes to the world. International events such as the dismantling of USSR and the end of communist regimes other than those of the USSR as well as Eastern Europe, the unification of Germany, the communist government of China inviting FDI, and former closed economies such as India pursuing a policy of Liberalisation, Privatisation and Globalisation, etc., have contributed in altering the entire world into one economic theatre.

5. Technology is acting as a catalyst to multiply the speed of globalisation. Communication has brought important changes in the way business is performed. Due to communication technology, organisations are dividing their operations all over the world. Now organisations are setting up there fundamental research centres in the US and Britain, value added research centres at China and India, production facilities are moved to India, South East Asia, China or Mexico, designing is moving to Italy and France, quality control techniques are applied from Japan and then the product is marketed globally. All these activities can be coordinated and managed only through the contemporary means of communication and technology. It is due to technology that organisations are able to take benefit of such huge opportunities.

Caution: Globalisation has thrown up new challenges like growing inequality across and within nations, volatility in financial market and environmental deteriorations. Another negative aspect of globalisation is that a great majority of developing countries remain removed from the process. Till the nineties the process of globalisation of the Indian economy was constrained by the barriers to trade and investment liberalisation of trade, investment and financial flows initiated in the nineties has progressively lowered the barriers to competition and hastened the pace of globalisation.

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