Technology in Global Markets
This article will focus on technology in global markets. Businesses in global markets have gone through e-transformations as a result of the Internet and its related communication technologies. Areas of description and analysis will include the phenomenon of globalization, the pace of technological development, the knowledge-based global economy, and emerging high-tech businesses. In addition, issues of the relationship between developing countries and e-commerce, technology management, global technical standards, and global-distribution networks will be introduced.
Keywords Commerce; E-Transformation; Global Distribution Networks; Global Markets; Globalization; Internet; Knowledge-Based Global Economy; Technology Management
Technology affects the pace and growth of business in global markets. Technological change drives economic development. Historical examples of technologies that changed business practices include the nineteenth-century railroad and twentieth-century mass production manufacturing technologies. In the 1990s, new information and communication technologies began a business revolution with new products, services, business models, and economic markets. Information and knowledge have become both the means and the product of many businesses around the world. Terms such as the information super highway and the information society became popular descriptors of modern life for Westernized countries. The Internet, and its related communication technologies, is a driving force in shaping and operating businesses and global markets.
In an effort to unpack the deep relationship between technology and global markets, this essay will describe and analyze the following topics and issues:
- Globalization and the emergence of global economic markets;
- Global markets and the pace of technological development;
- Global markets and the knowledge-based global economy;
- Global markets and emerging high-tech businesses; and
- Issues of developing countries and e-commerce, technology management, technical standards, and global-distribution networks.
Global markets are characterized by an increasing mobility in capital, research and design process, production facilities, customers, and regulators. Global markets, created through socioeconomic changes, political revolutions, and Internet and communications technology, have no national borders. Modern globalization, and resulting shifts from centralized to market economies in much of the world, has created opportunities for increased trade, investment, business partnerships, and access to once closed global markets.
Economic environments around the world have been changing due to the forces of globalization. Globalization is characterized by the permeability of traditional boundaries of nations, culture, and economic markets. The fundamental economic forces and events influencing globalization around the world include the end of communism in much of the world; the change from an economy based on natural resources to one based on knowledge industries; demographic shifts; the growth of a global economy; increased trade liberalization; advances in communication technology; and increased threat of global terrorism (Thurow, 1995).
Globalization creates a turbulent global sociopolitical environment characterized by competing political actors, shifting power relations, and politically driven changes in national economies around the world. Businesses work to find opportunity and profit in the political and economic changes. The political turbulence and upheaval have resulted in a move from centralized economies to a decentralized global economy and have created numerous emerging markets (even despite the Great Recession of 2007 to 2009). These emerging markets are the capital markets in developing countries that have chosen to promote capital flows and foreign investment by liberalizing their financial systems.
Business opportunities, including international investments and joint ventures, in the global economy have been increasingly tied to trade pacts such as the North American Free Trade Agreement (NAFTA) between the United States, Canada, and Mexico; the Mercosur trade pact between Argentina, Uruguay, Brazil, and Paraguay; and the Asia Pacific Economic Cooperation (APEC) trade zone. In addition, business opportunities have resulted from privatization worldwide. “Countries are privatizing many state-owned industries and allowing foreign investors to purchase pieces of them through joint ventures or local operations to participate in these projects” (Sites, 1995). According to Sites (1995), emerging markets, often occurring in countries experiencing political upheaval, will continue to increase in the expanding global market, and businesses, participating in the new global economy, will continue to seek out new manufacturing and sales opportunities in foreign markets and countries.
Technological development, as an integral part of a corporation's research and design process (R & D), is heavily influenced by changes in corporate business practices and development of global markets. Factors in the emerging global markets that influence technological development include increases in the pace of development, labor productivity, and competition. In addition, technological development in global markets is influenced by changes in corporate governance practices (Ahlstrom, 2004).
Increased pace of development: The development of global markets has spurred the development of high-tech businesses. Global markets emphasize fast growth facilitated through new business procedures and new technologies (such as social media via the Internet and other networking technologies). Increased spending in research and design has yielded a wide range of profitable new products and services. The profits from economic growth provide funds for further technological development and investment. Both public and private sector interests have invested and driven the pace and direction of technological development in global markets. High-tech firms, with fast-paced product development tracks, depend on equity funding by venture capitalists, market investors, stock options, brand-building, and corporate reputation to establish themselves as competitors in the global marketplace.
Increased labor productivity: The rate and pace of labor productivity is used by economists as a measure of the economic health of a country. Labor productivity refers to a business's output divided by the number of employees. Increased labor productivity, resulting from expanded global markets and new technologies, increases profits, spending, product development, and the overall economic health of a country.
Increased competition: Economic growth in the marketplace increases competition between local and foreign firms. Trade agreements, such as the North American Free Trade Area (NAFTA) and the single European market in the early 1990s, have created new opportunities and new competitors. The interdependent global economy creates new levels of competition among foreign and multinational corporations. Modern globalization, and resulting shifts from centralized to market economies in much of the world, have created both need and opportunity for economic development in developing countries and regions of the world. Open markets and foreign development aid have created new competitors in business sectors. Corporations around the world have adopted new management practices and have built their brands in an effort to compete in global markets.
Changes in corporate governance practices: Participation in global markets requires corporations to respond to consumer and stakeholder demands, adopt performance and environmental standards, and institute clear corporate governance, accountability, and transparency procedures. The globalization of product and financial markets requires corporations to adopt product and performance standards that have become common to business practices in Western firms.
The relationship between new technologies and emerging global markets has influenced the fundamental organizational structures and principles that define business organizations. A knowledge-based global economy has emerged based on the selling, buying, and trading of information and knowledge. Information as an engine for economic growth, rather than...
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