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An evaluation of the positive and negative effects of globalization today

  1. He compares manufacturing to agriculture—although it will no longer dominate the economy or provide the majority of jobs, it will continue to perform an important function even in a service-oriented society. This is particularly true with regard to the information technologies—the one technology most rapidly changing other technologies.
  2. Government plays a central role in technology issues at the national level.
  3. Despite their influence in shaping a new pattern of global competition, each has unique problems.

New materials are revolutionizing sectors as diverse as construction and communications. Advanced manufacturing technologies have altered long-standing patterns of productivity and employment. Improved air and sea transportation has greatly accelerated the worldwide flow of people and goods. All this has both created and mandated greater interdependence among firms and nations.

The rapid rate of innovation and the dynamics of technology flows mean that comparative advantage is short-lived.

To maximize returns, arrangements such as transnational mergers and shared production agreements are sought to bring together partners with complementary interests and strengths. This permits both developed and developing countries to harness technology more efficiently, with the expectation of creating higher standards of living for all involved.

Rapid technological innovation and the proliferation of transnational organizations are driving the formation of a global economy that sometimes conflicts with nationalistic concerns about maintaining comparative advantage and competitiveness. It is indeed a time of transition for firms and governments alike. This book provides a broad overview of these issues and seeks to shed light on such areas as the changing nature of international competition, influences of new technologies on international trade, and economic and social concerns arising from differences in national cultures and standards of living associated with adoption and use of new technologies.

Page 2 Share Cite Suggested Citation: The National Academies Press. On the one hand, their assessment made clear that though most technological advance occurs in industry, there are too few mechanisms for exchange of views on international technology and cooperation that involve both private and public sector representatives in a forum not an evaluation of the positive and negative effects of globalization today by the formal policies and stands of national governments.

There is great need for improved and more open lines of international communication on topics where engineering and technology intertwine with trade and economic growth.

The second includes relationships at the institutional level, that is, the impact of technology on the management of businesses and industries. The fourth relationship occurs at the international level. Here information flows, trade frictions, and alliances characterize technological development, its diffusion, global competition, and economic advance. At the human level a key area of change is the invisible contract between a manufacturing company and its customers and employees.

In the factory, we are seeing a movement away from the expectation that workers should be organized to fit the technologies and a movement toward networking and Page 3 Share Cite Suggested Citation: As a result of this phenomenon, organizations that pursue single objectives may be less suited for survival than those that consider a broader range of issues that optimize the human, organizational, and technological elements.

Morris Tanenbaum pointed out that this endeavor embraces many disciplines basic science, engineering, production, distribution, marketing, and finance and individual motivations. Many participants and observers of the contemporary technological scene propose that we are going through a period of discontinuous change as the breadth of technological applications expands and the time scale of change becomes shorter. This is particularly true with regard to the information technologies—the one technology most rapidly changing other technologies.

It achieves its greatest power when it is most global; where it provides the means to obtain access to the information systems of other countries and establish arrangements that promote the transfer of technology.

Government plays a central role in technology issues at the national level. Technology has now become a part of almost every political discussion as politicians have realized the impact of technology on world events. Public attitudes among various countries also differ, and these differences can affect governmental technology policy.

In this respect, multinational corporations, responsibly managed and sensibly treated by the countries in which they invest, Page 4 Share Cite Suggested Citation: From an international perspective, the main issue is to sustain and improve world growth and improve growth per capita. This breaks down into the problems of Western Europe, Japan, the United States, Eastern Europe and the Soviet Union, and the problems of the more and less advanced developing countries.

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Robert Malpas noted that it becomes essential for all these players to harness technology for growth; however, this effort is frequently constrained by protectionism, concerns about intellectual property, the demands of international marketing and finance, and, of course, national security. The net result appears to be that emerging nations, with a few exceptions, have even more difficulty achieving the growth necessary to close the gap with leading nations.

Among the trends at the international level that can help sustain and improve world growth: As evidenced by the papers in this volume, these four relationships at the human, institutional, national, and international levels permeate discussions on the globalization of technology.

  • The maquiladoras, or production sharing sites, have been the subject of debate in Mexico for a number of reasons;
  • The rate of innovation, the ability to apply advanced technology, the degree of capital investment, use of natural resources, and the existence of technological support services all affect the competitiveness of Latin America in foreign markets;
  • This practice contrasts with that of the United States, where advanced technologies are frequently applied to complex products in the defense industry;
  • Enrique Martin del Campo deals specifically with the influence of technology on development in the Latin American and Caribbean countries;
  • Rapid technological innovation and the proliferation of transnational organizations are driving the formation of a global economy that sometimes conflicts with nationalistic concerns about maintaining comparative advantage and competitiveness;
  • In the factory, we are seeing a movement away from the expectation that workers should be organized to fit the technologies and a movement toward networking and Page 3 Share Cite Suggested Citation:

In his keynote paper, Simon Ramo maintains that technological issues lie at the heart of most of the social, economic, and political issues of today, sometimes causing problems but more often offering possibilities for their solution.

From this perspective, Ramo goes on to make several intriguing predictions about the role of technology in the future. Particularly powerful influences on the diffusion of new technological processes and products will be governments, corporations, national security concerns, and the rate of advances in scientific research.

  1. Kolm asserts that progress in the region is likely to continue, considering that there are suitable gradations of development, ample raw materials in the region as a whole, and a populace that has demonstrated its ability to cope with technological change.
  2. Shifts in economic strength and investment patterns influence the developing countries and make it imperative for them to develop strategies for growth through improved technological and entrepreneurial activity.
  3. Ramqvist concludes that because information technologies allow for the dissemination of information, and thus understanding, they will form the basis for a more equitable, humane society. One change that poses both opportunities and difficulties is the rapid diffusion of technology to other countries.
  4. On the one hand, their assessment made clear that though most technological advance occurs in industry, there are too few mechanisms for exchange of views on international technology and cooperation that involve both private and public sector representatives in a forum not constrained by the formal policies and stands of national governments.
  5. Another force driving the trend toward cooperation is the increasingly scientific nature of technology, which requires that firms take a cross-disciplinary approach to solving problems. One of these influences impeding the flow of technology is national security concerns.

Technological discovery will become a global rather than an individual or national endeavor. As a result, new mechanisms will be developed to facilitate the flow of technology, despite protectionist-nationalist tendencies to stem the free exchange of information. One of these influences impeding the flow of technology is national security concerns. Ramo, however, is optimistic about the direction of the two superpowers, predicting that offensive forces will be reduced, thereby lessening interference with the flow of advanced technology and allowing the application of military technologies to peacetime applications in manufacturing, transportation, and services.

Since the role of government in setting a national direction for technology is so pervasive, its relationship to the private sector in the Page 5 Share Cite Suggested Citation: It is also the government, he says, that will be the primary obstacle to diffusion of the benefits of technology to world society. As experts on the costs and benefits of developing technology, engineers are in a key position to contribute to policy formation of these issues.

For engineers to better prepare themselves for the future, Ramo suggests that engineering education place more emphasis on the links between engineering and its societal applications.

The result, he says, will be engineers equipped to play a broader role in influencing government policies and practices regarding technological advance. He compares manufacturing to agriculture—although it will no longer dominate the economy or provide the majority of jobs, it will continue to perform an important function even in a service-oriented society.

Certain key technologies are bringing about this transition, both creating new industries and rejuvenating mature ones, and in the process are changing patterns of development throughout the world. The rapid spread of innovation makes it imperative that firms quickly exploit any competitive advantage. Moreover, their increased ability to operate in the global marketplace rein-forces the importance of cooperative agreements to advance innovation. Another force driving the trend toward cooperation is the increasingly scientific nature of technology, which requires that firms take a cross-disciplinary approach to solving problems.

Despite their influence in shaping a new pattern of global competition, each has unique problems. The United States, though a leader in developing emergent technologies, is facing the double threat of enormous budget and trade deficits as well as deindustrialization of traditional economic sectors. Japan, which has demonstrated enormous success in commercializing new technologies, has an economy excessively dependent on exports.

Western Europe has the cultural tradition and core of excellent research groups to facilitate its leadership in the technology arena, yet it lacks the cohesion necessary to develop strategic initiatives in important sectors. Colombo optimistically an evaluation of the positive and negative effects of globalization today that globalization will bring the emergence of many small and medium-size multinational firms that will rely on Page 6 Share Cite Suggested Citation: Governments will provide oversight and strategic direction.

The impact on developing countries will be enormous. With the help of new technologies, Third World countries can transform their raw materials and energy into value-added commodities and thereby accelerate economic development without dysfunctional effects.

It is the responsibility of developed countries, Colombo concludes, to see that this happens. Though desirable, the alliances proposed by Colombo are not easily established. As Gerald Dinneen points out in his paper on trends in international technological cooperation, international arrangements, whether they be international marketing organizations, joint ventures, or creation of subsidiaries, are necessary if industries are to get a proper return on investment and remain competitive.

Despite these barriers, Dinneen says, international labs and exchanges of scholars and students in schools of engineering have been effective mechanisms for fostering international cooperation. Western Europe, he says, faces the unique difficulties posed by its diversity and nationalistic tendencies. George Pake describes a number of key advances in software: The creativity so evident in software technology today is not in danger, Pake says, despite the trend toward greater standardization and the possibility that ossification of the development system could occur in the future.

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Pierre Aigrain addresses several provocative questions about materials, particularly pertaining to the rate at which discoveries are made, the extent to which applications are found, and the impact of these discoveries on industry and society.

Citing the influence of the market and the continued interaction between science and materials research, Aigrain predicts that the rapid trajectory of materials discovery will continue.

The development of superconductors illustrates this point, and he concludes with a description of the impact these new materials in particular will have on industry and society.

Lars Ramqvist provides insight on several of the cutting edge technologies that have had a major impact on information technologies. These include VLSI technology, computers, software and artificial intelligence, fiber optics, networks, and standards. In addition, he looks at three main applications of information technologies—normal voice telephony, mobile telephony, and data communications—assessing, first, the current state of the art and, second, projections for the future.

Ramqvist concludes that because information technologies allow for the dissemination of information, and thus understanding, they will form the basis for a more equitable, humane society. Hiroshi Inose examines the telecommunications sector from a different angle—the effect of globalization on the entire industry.

Particular technological advances, for example, the convergence of service modes and the microelectronics revolution, provide economies of scale but also require rapid inputs for capital investment.

Among the problems and challenges Inose addresses are the software crisis, or the high cost of developing more sophisticated and diversified software; structural changes in industry, particularly in job design and labor requirements; standardization and maintaining interoperability between systems and equipment; reliability and security of systems against both external and internal disturbances; and integrity of information and protection of privacy.

Like Ramqvist, Inose views telecommunications technology as the means to promote mutual understanding and cultural enrichment worldwide. Perspectives on the impact of technology on another industrial sector—construction—are presented by Alden Yates who describes the most significant trends in the areas of construction-related design, construction equipment and methods, automation and expert systems, and construction management.

Computer-aided design has, among other things, improved communication between designer and supplier and speeded up the design development process. Increases in productivity are being achieved through off-site fabrication and assembly and robotics.

  • The impact on developing countries will be enormous;
  • In the factory, we are seeing a movement away from the expectation that workers should be organized to fit the technologies and a movement toward networking and Page 3 Share Cite Suggested Citation;
  • As experts on the costs and benefits of developing technology, engineers are in a key position to contribute to policy formation of these issues.

Logistics practices, skill requirements, and labor-management relations are also changing as a result of these new technologies. In the long run, however, the effectiveness of management will determine success. Pehr Gyllenhammar makes a complementary point about the importance of management practices in his paper on the manufacturing industry.

To claims that the manufacturing sector is on the decline in an increasingly Page 8 Share Cite Suggested Citation: One of the most influential changes has been the new technologies employed in the automotive sector, including new engineering materials, computer-aided design, robots, and microcomputers.

These new technologies mean that decision making can become decentralized and that small-scale manufacturing can be cost-effective. Another important factor changing the manufacturing industry has been new demands from employees and customers, what Gyllenhammar refers to as the invisible contract between them and the corporation. In fact, the new technologies have brought about important changes in the way work is organized. Less desirable tasks have been taken over by robots; light, flexible technologies allow workers to organize themselves so that they command the technology instead of vice versa; and new materials-handling mechanisms permit the layout of equipment to fit particular work organizations.

The challenge for managers lies in organizing production so that they can develop their workers through both technical and leadership training. Gyllenhammar concludes that a viable manufacturing industry is necessary but not sufficient to solve the problems of unemployment and slow growth. The manufacturing industry is also the subject of the paper by Emilio Carrillo Gamboa; however, he discusses the issue of production sharing as both a result and a means of globalizing industry.

Mexico, in particular, has become an important production-sharing partner for the United States because of proximity, demographic factors, and the Mexican economic crisis which has resulted in lower wage levels that an evaluation of the positive and negative effects of globalization today competitive with labor costs in the developing countries of Asia and government programs that support production-sharing.

The maquiladoras, or production sharing sites, have been the subject of debate in Mexico for a number of reasons: In addition, some of the plants have been criticized for their poor working conditions. Nevertheless, the author contends that they are an important source of income, employment, and foreign exchange, and proposes that the production sharing offers significant economic opportunities if the competitive advantages of Mexico as a production-sharing site are improved and assembly activities are more closely linked with the domestic economy.

Carrillo Gamboa acknowledges the objections to offshore production sharing but suggests that its economic and political advantages far outweigh the disadvantages. Page 9 Share Cite Suggested Citation: For example, gross national product GNP has increased rapidly due to the globalization of industry, and export-driven economies have helped the Pacific Rim nations overcome the disadvantages of scale and the shortage of foreign exchange.