An Overview of Globalization and Technology.
Did you know that paper reached Europe 1,000 years after it was invented in China in the early centuries? Globalization has facilitated the spread of innovation internationally much more quickly today.
The globalization of technology and information has spread around the globe. Although global productivity growth has been weak in recent periods, technology transfer has supported productivity and innovation in emerging markets.
While technology and globalization have contributed to the development of numerous countries, they have also fueled inequality. Why does this happen? You may ask. An example of the impact of technology (in its widest sense) on wages over time comes from a recent study from the University of California, Los Angeles.
The research examined the introduction of something as relatively mundane as broadband into Brazil between 2000 and 2009. It revealed that the technology coincided with an increase in wages across the labor market, but whereas the average employee saw wages rise by just 2.3%, those in managerial positions saw a 9% raise, and those in the boardroom saw an even more impressive 19% boost to their income. The hypothesis proposed by the researchers is that the new technology allowed the more productive workers to be further productive, thus widening the income gap between them (Gaskell, 2019).
Globalization seems to have also fostered inequality through the effects of increasing specialization and trade. Wages of a segment of the workforce (usually low-skilled and low-wage workers) drop because there is less demand for their skills, while the paychecks of higher-skilled workers increase (world bank, 2014).
Globalization has been criticized for potentially damaging side effects, but the expansion of technology across borders has been amplified in two ways by globalization. In the first place, globalization makes access to foreign knowledge easier for countries. A second benefit is that international competition is improved, in part because emerging market firms are more likely to adopt foreign technologies and innovate (Aslam, 2018).
Technological progress and globalization have played key roles in driving the improvements in incomes and standards of living. In developing countries, the transfer of technology has served to help heighten innovation and productivity even in the current phase of weak global productivity growth. South Africa, for example, has experienced economic and social development due to the spread of information and technology.
In the end, it becomes apparent that it is pointless to stop technological advancements or globalization. It is necessary to supplement technological advancements and globalization with policies that ensure everyone in each skilled segment benefits equally.
References
Gaskell, A. (2019, May 3). Technology Isn’t Destroying Jobs But Is Increasing Inequality. Forbes. https://www.forbes.com/sites/adigaskell/2019/05/03/technology-isnt-destroying-jobs-but-is-increasing-inequality/?sh=7d3b21fa5e78
World Bank. (2014, June 23). Theorist Eric Maskin: Globalization Is Increasing Inequality. https://www.worldbank.org/en/news/feature/2014/06/23/theorist-eric-maskin-globalization-is-increasing-inequality
Aslam, A. (2018, April 9). Globalization Helps Spread Knowledge and Technology Across Borders. IMF Blog. https://blogs.imf.org/2018/04/09/globalization-helps-spread-knowledge-and-technology-across-borders/
