The Globalisation of Technology and its Implications .

Windows of Opportunity or Further Burden? Page 1

The Globalisation of Technology and its Implications .

Windows of Opportunity or Further Burden?

Emmanuel Serrano

Soc Sci 114

Ms. Carleen M. Ilagan

April 26, 2020

Page 2

The Globalisation of Technology and its Implications .

The Globalisation of Technology and its Implications .
Windows of Opportunity or Further Burden?
Windows of Opportunity or Further Burden?

INTRODUCTION
Technology is the vital force in the modern form of business globalization.
Technology has revolutionized the global economy and has become critical competitive
strategy. It has globalized the world, which drive all the countries to more ethical
standards. This paper attempts to show how Technology revolution is sweeping the
globe and the transition from manual to electronic delivery of services both in public and
private sector leads to advancement of business community throughout the world.
Globalization has lead to new markets and information technology is one of the
technologies fostered to the new market in this increasing competitive world.
Technology has helped us in overcoming the major hurdles of globalization and
international trade such as trade barrier, lack of common ethical standard,
transportation cost and delay in information exchange, thereby changing the market
place. Technology has enabled the software experts to work collaboratively over the
network with companies from around the world. The technological advancement has
helped a lot in creation and growth of global market. Multinational Corporations (MNC)
can be seen as a central actor in globalization. Markets have become global at a rapid
pace, as indicated by several kinds of trade extended to foreign countries. The
innovation in host country is often undertaken by MNC based in one country and due to
the technological advancement MNC(s) have expanded to other countries by some
kinds of FDI also facilitating the movement of research and development. The
researchers have analyzed that though the technology has globalized the business but
economically well developed countries have been more benefited. While technology has
created many opportunities for global networks of tasks it is important to look at the
friction in the system to understand the limitations. The sources of friction are many and
could bring the system to its knees. Companies and countries that want to thrive in this
era of globalization will seek to mitigate the abuses, while dealing with the friction

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READVIEW OF LITERATURE
The Globalisation of Technology and its Implications .
Windows of Opportunity or Further Burden?
Technology has often been studied by economists with the tools of analysis of a
competitive market. Thus, if technology may be studied like any other commodity, and if
markets were freely working and perfect competition prevailed, then no problem of
technology transfer would pose. Technology (from whatever source) would be easily
transferred and utilised. The efficiency of its use would only be a matter of ensuring the
conditions for efficient resource allocation in the context of exogenously determined
technological alternatives. Technology policy would only consist of government
sponsorship of institutes that collect, process, and disseminate technical information,
justified as a provision of public goods. This conception descends from two assumptions
: (i) technology consists simply of a set of techniques wholly described by their
'blueprint'; (ii) all techniques are created in the developed countries, from which they
flow at no or low costs to developing countries (for a recent reaffirmation of this old
belief, see Mankiw, 1995). However, several authors recognised, already a few decades
ago, the special features of technology and technological change, leading to a
perception of technology in more complex terms. Thus, first of all, no existing technique
is completely expressed by the sum and combination of their material inputs and the
codified information about it. In fact, much of the knowledge about how to perform
elementary processes and about how to combine them efficiently is tacit, not feasibly
embodied, nor codifiable or readily transferable, and 'a firm will not be able to know with
certainty all the things it can do, and certainly will not be able to articulate explicitly how
it does what it does.' (Nelson, 1987:84) This means that technology is not simply a set
of blueprints, or of instructions, that if followed exactly will always produce the same
outcome. Although two producers in the same circumstances may use identical material
inputs with equal information available, they may nonetheless employ two really distinct
techniques due to their different imderstanding of the tacit elements. Thus, techniques
are sensitive to specific physical as well social circumstances (Evenson and Westphal,
1995:2212) Moreover, technology is not instantaneously and costlessly accessible to
any firm: a firm does not simply select the preferred option from the freely available
international technology shelf, as there may obstacles and difficulties in obtaining the
desired technology. Simply choosing and acquiring a technique does not imply
operating it efficiently ('at best practice"). Individual firms do not have a complete
knowledge of all the possible technological alternatives, their implications, and the skill
and information they require. The entire production curve, illustrating an infinite number
of alternatives, is not known to the individual firm, as neo-classical theory assumes. To
the extent technologies are tacit, firm production sets are fuzzy around the edges Page 4

(Nelson, 1987:84). Understanding technology in these more complex and realistic terms
implies that tangible and intangible investments in technology are required whenever
technology is newly applied. This applies to domestic as well as foreign imported
technologies. Each firm has to exert considerable absorptive efforts to leam the tacit
The Globalisation of Technology and its Implications .
Windows of Opportunity or Further Burden?
elements of technology, and gain adequate mastery. This is at the opposite extreme
from the neo-classical premise that technology, aswell as productive inputs and outputs,
is perfectly known. This knowledge is not instantaneously and costlessly available to all
firms, and technology transfer poses substantial problems of adaptation and absorption
that are related to investments in technological capability i.e. the complex array of skills,
technological knowledge, organisational structures, required to operate a technology
efficiently and accomplish any process of technological change.' This dynamic
technological effort implies a process of learning that is qualitatively different from the
traditional 'learning by doing', as it involves an active attitude. Learning may be pursued
in a variety of ways (Bell, 1984), and the passive 'learning from operating' is only one
possibility. A powerftil way of learning is by training within producing firms. This has the
disadvantage that training will probably stay at a level below what would be socially
optimal, because of the well-known problem of incomplete appropriability of its results,
but in-firm training will be more appropriate as the firm will provide exactly the kind and
quantity of training necessary for the absorption and advancement of technology (Enos,
1991:80). Furthermore, learning itself has to be learnt, as it is a highly specialised
process, that involves the organisation of the accumulation of technical knowledge
(Stiglitz, 1987). In addition, even if the need for learning efforts is acknowledged,
investing in learning does not ensure success. This is due to the stochastic nature of the
learning process, that is influenced by the external environment and by firm's actions,
and results from dependence on historical circumstances, entrepreneurial skills and
luck. Therefore, different firms may reach persistently different levels of efficiency and
dynamism, also in competitive markets (Nelson, 1981, Dosi, 1988). Within this broader
context, technology transfer becomes an important issue that has to be assessed jointly
with a country' capability to make use of technology, absorb it and adapt it to local
conditions. In other words, technology transfer links foreign technology access and
acquisition to its efficient use for economic development, and to the catching up of the
relatively technologically backward countries (Evenson and Westphal, 1995). Thus, the
access to and acquisition of foreign advanced technology, by itself is not sufficient to
ensure local technological and industrial development. Several other elements are
needed. An additional central component of a country's industrial development policy
strategy is technological effort oriented to the absorption, adaptation, mastery and
improvement of technology. This itself implies a continuous process of technological Page 5

change (Katz, 1987, Lall, 1992a). Once this conception of technology is accepted, it is
much easier to understand that the globalisation processes will have a very different
impact in technology and that there is no reason to assume that globalisation will
provide benefits to all regions and agents. The next section presents a taxonomy of the
globalisation of technology which may help to identify the various forms to exploit and
acquire know-how.
The Globalisation of Technology and its Implications .
Windows of Opportunity or Further Burden?
A New Taxonomy of the Globalisation of Technology
In the last few years, too many heterogeneous phenomena have been lumped
together under the label the globalisation of technology, and the concept has thus lost
much of its significance. We thus attempted (Archibugi and Michie, 1995; 1997) to find
our way in the labyrinth of the globalisation of technology by identifying three main
categories:
a) the international exploitation of nationally-produced technology;
b) the global generation of innovation;
c) global technological collaborations.
The aim of this taxonomy is to classify individual innovations according to the
ways in which they are exploited and diffused internationally. Both at single enterprise
and national levels, the categories are complementary, not alternative. Enterprises,
especially large ones, generate irmovation following all the three procedures described.
From a historical point of view, these categories emerged in three different stages, even
though the second and the third added to, rather than substituted the oldest one. The
categories of this taxonomy and the main forms through which the three processes
manifest themselves are shown in Table 1 (for their empirical importance, see Archibugi
and lammarino, 1998), while Table 3 reports the implications of the globalisation of
technology for national economies.
Bartlett and Ghoshal (1990) have singled out three main strategies of TNCs:
Centre-for-global. This is the traditional 'octopus' view of the TNC: a single 'brain'
located within the company headquarters concentrates the strategic resources: top
management, planning, and the technological expertise. The 'brain' distributes impulses
to the 'tentacles' (that is, the subsidiaries) scattered across host countries. Even when
some overseas R&D is undertaken, this is basically concerned with adapting products
to the needs of the local users. Local-for-local. Each subsidiary of the firm develops its
own technological know-how to serve local needs. The interactions among subsidiaries Page 6

are, at least from the viewpoint of developing technological innovations, rather weak. On
the contrary, subsidiaries are integrated into the local fabric. This may occur with
conglomerate firms, but also in the case of TNCs which follow a strategy of
technological diversification through tapping into the competence of indigenous firms.
Local-for-global. This is the case of TNCs which, rather than concentrating their
technological activities in the home country, distribute R&D and expertise in a variety of
host locations. This allows the company to develop each part of the irmovative process
in the most suitable environment: semiconductors in Silicon valley, automobile
The Globalisation of Technology and its Implications .
Windows of Opportunity or Further Burden?
cóíftponents in Turin, software in India. The effectiveness of such a strategy relies on
the intensity of intra-firm information flows.

Discussion
Different technologies often facilitate certain kinds of globalization, and to the extent that
this is true, technologies may have some politics embedded in them .
Manuel Castells’ Framework A more critical understanding that allows us to deal with
the complexities of different technologies, but also avoids the fatalism implicit in
technological determinist explanations, is clearly needed. One recent attempt to
formulate such a theory which has received considerable attention is the work of
Manuel Castells’ trilogy,
“The Information Age: Economy, Society and Culture.” Castells’ work is a good
starting point for a discussion of the political implications of the new technologies; it
represents probably the most comprehensive and empirically detailed yet theoretically
developed discussion of the implications of the digital media to appear so far, and has
been widely read and received positively by many reviewers.9His theoretical framework,
however, requires careful consideration. Unfortunately, he is unable to use this
framework as a basis for a critical study of globalization without lapsing into deter-
ministic explanation. After a quick summary, I will attempt to show how this failure takes
place, and then make some suggestions as to a more satisfactory alternative.
Castell’s framework is not actually original; it is derived from Daniel Bell’s discussion
of post-industrial society. This perspective holds that social orders have two essential
char- acteristics, which are referred to as their “mode of production,” and “mode of
development.”10 Both of these shape the way society functions and changes, but
neither controls the other. Their mutual interaction holds the key to explaining historical
changes such as the current transition to what he calls the “Network Society.” Castells Page 7

follows Bell’s use of the term “mode of development” to refer to the way that goods and
services are produced, and the term “mode of production” to describe the way that
surplus is distributed and consumed. Developmentis either “pre-industrial” (or agrarian),
industrial, or informational (Castells’ new term for Bell’s “post-industrial.”11)
Modes of development are distinguished by their “source of productivity:” in agrarian
development, productivity comes about through increased cultivation of land; industrial
development utilizes new sources of energy, and informational society applies
knowledge and information as sources of “productivity.” That this accords with a popular
understanding of history, whereby the past is divided into ages based on the technology
The Globalisation of Technology and its Implications .
Windows of Opportunity or Further Burden?
of the time—the stone age, the bronze age, the iron age, the steam age, and now the
“information age” indicates the extent to which technological determinism penetrates
popular culture. Since by “mode of production,” Castells means something different from
what Marx means, it is not clear what different modes there could be. He only ever
discusses two possible modes, which he calls “statist” and “capitalist.” In the former,
distribution of the surplus is controlled by state elites, who use the surplus generated to
further the goals of the state, which are centred on the extension of its own power. The
latter is defined more conventionally, (surplus is distributed on the basis of profit-
maximizing) but never analysed on its own. Nowhere does he mention the possibility of
other modes of production, such as feudalism, or the possibility of a co-operative social
order.

Problems with Castells’ Framework It should be remarked, before engaging in the

critique of Castells’ position, that he is by no means uncritical of the contemporary
capitalist order or the network society. He is aware of the kleptocratic nature of the new
Russian order, the misery and tragic waste of human potential represented by what he
calls the “fourth world,” and other terrible aspects of the emerging global capitalist world.
The problem is not that he endorses that world, or even that his analysis fails, as he
admits, to lead to any suggestions about how it could be changed,14 but that, in the
end, he reproduces the illusion of historical inevitability of the existing path of
technological development and, consequently, the inevitability of the global expansion
of capitalism.
Microsoft may serve as a helpful example here as well. Their workforce is divided into
a core of highly-paid permanent employees with benefits and stock options, and a much
larger, lower tier of temporary employees with no benefits, stock options, or security.
While many of that lower tier might prefer the flexibility of contract work, enough of them Page 8

were dissatisfied enough to launch a discrimination lawsuit against Microsoft.20 And

this seems to be a particular habit in the “new economy;” the proportion of temporary
workers in Silicon Valley is triple that of the US as a whole. For Castells what is
significant is the novelty of the “network” as a social phenomenon, while for those who
continue to experience alienation and exploitation, the lack of change might be said to
be more significant. Castells’ approach under emphasises the class relations in which
power operates and emphasises the relations within the capitalist class which organize
their activity instead.
Levels of Analysis Apart from the manner in which they distract attention from
important continuities, Castells’ cate- gories for analysis of technology, history and
The Globalisation of Technology and its Implications .
Windows of Opportunity or Further Burden?
society contain a further problem. Using Bell’s classification of social orders in terms of
both “mode of development” and “mode of production” to avoid reductionism does not
help clarify the relation between technology and social changes. He is not merely
overestimating the scope of the current transformation, but also making it impossible to
explain many historical examples of social transformations.
Castells claims that:
In 1999, there was no indisputable, clear authority over the Internet in the US or
in the world—a sign of the freewheeling characteristics of the medium, both in
technological cultural terms.
He claims that the new technologies were incompatible with the Soviet economic
structure, and second, that the Soviet Union had no choice but to adopt them anyway,
thus forcing the society to abandon its economic structure. Neither of these seem to be
supported in the form in which they are presented by his evidence, although his
argument can still be expressed without the determinist framework in which he sets it.
The first claim may be true, but there is little in the chapter to argue against the
possibility that a command economy might be compatible with the use of digital media.
That the technology allows for greater flexibility does not mean that its users have to be
free from state planning and control: decisions about when the system takes advantage
of the technology’s ability to adapt to new conditions could still be made centrally, and
other adaptations using the technology might be strictly prohibited by law. The
technology need not be implemented and governed the same way it is in the capitalist
economy of the West, since its political implications are not embedded in its technical
characteristics.

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Technology requires certain conditions, of scientific knowledge, and of other

technology, before it can be developed. A second source of the autonomy of technology
is the way that technology, once developed, doesn’t necessarily function as intended by
those that developed it. Since our consciousness is shaped by our social life, it is often
difficult to imagine new kinds of social relations that might be made possible by new
technologies. And sometimes technologies make some new forms of social relations not
just possible, but more practical, and lend power to new kinds of social structures. One
frequently-employed example of this is the development of the printing press, originally
intended to copy bibles more efficiently, but which certainly had other consequences.

Conclusions
The Globalisation of Technology and its Implications .
Windows of Opportunity or Further Burden?
Globalisation offers a new opportunity for knowledge dissemination, but this does
not mean that all the nations and institutions will equally benefit from it. On the contrary,
it seems that the institutions that have managed to benefit most from globalisation are
those that already are at the core of scientific and technological advance
developing countries are not automatically excluded from the advantages. They
can benefit from globalisation of technology if they implement active policies designed
to increase learning and improve access to knowledge and technology [39]. A few
success cases have been pointed out here. A larger number of successful cases are
presented by Conceic˛a˜oet al.. We are aware that these cases, unfortunately,
represent an exception, not the rule, and that huge parts of the world are not benefiting
yet from the opportunities offered by technological change and its globalisation.
However, the few success stories can be instructive in order to indicate a suitable
development strategy. We have also argued that the three categories of the
globalisation of technology require different learning strategies, and therefore that, if a
country has a choice, it might have good reasons to prefer one form to another. In
particular, we have argued that the import of foreign technology, either embodied or
disembodied, has a negligible learning impact per se, unless when accompanied by
local policies to promote learning, human capital and technological capabilities. Public
policies should therefore try to induce foreign firms to move from exporting their
products to producing locally, and transferring a technological component.
Furthermore, it is often more advantageous for a developing country to set up
interfirm strategic technological agreements than simply hosting production facilities of
foreign firms. Public policies should therefore also try to ‘‘upgrade’’ FDI to strategic Page 10

technological partnering. We have argued that collaborations among public and

business organisations can provide substantial benefits to developing countries.
Policies at both the national and intergovernmental levels should therefore consider
these collaborations as a preferential channel to transfer and acquire technological
competencies

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