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Technological Advances have Presented a Variety of Opportunities and Challenges for
Globalization of the Manufacturing and Service Sectors

Toletha Sylvester

* * Technological advances domestically and globally have changed the way we live, conduct business, and view ourselves. Recent milestones and advances in our communication processes relative to information flow in digital form has spawned what has sometimes been referred to as an “IT revolution” (The Levin Institute). This technological revolution has done more than changed our everyday way of living at the micro-level, but has totally transformed and reshaped the various economies, markets, and business transactions of many countries and societies around the globe at the macro-level. * In particular technological advances have greatly increased a variety of opportunities as well as challenges for globalization of the manufacturing and service sectors. First, the United States has witnessed an enhanced and enriched global culture which has been facilitated by advanced technology (Alli, Winter, & May, 2007). As the United States continues to redefine what it means to change and modernize, so does the demand and interest in advanced educational attainment and product differentiation. Technology has by far had the greatest impact on the United States economy, education, transportation, information management, and knowledge transfer. * In order to truly understand globalization; one must define it. Lubbets (as cited in Alli et al., 2007) defines globalization as “the phenomenon that the degree of global human interaction increases to such an extent that both its primary effects and the reactions it provokes, give rise to numerous new developments.” Thus, for Lubbets, globalization is the interaction between economies, technologies, and politics. Interestingly, this marked growth in technology and in our global affairs has presented several noted opportunities for a lingering United States manufacturing sector and an enhanced service sector. Several researchers have noted key areas where globalization has had the greatest effects. Those are: the economy, information-communication technology, politics, business, and education (Alli et al., 2007). I examine each of these areas and the impact globalization has had on the manufacturing and service sector noting the opportunities and challenges. * Globalization and technology in the economic domain has certainly enhanced the United States manufacturing sector by stimulating trade between countries by promoting the decrease in tariff and non-tariff barriers as mandated by the General Agreement on Tariffs Trade (GATT) (Alli et al., 2007). This allows for the freedom of movement of firms around the world thus, increasing opportunities for diverse and multiple markets for manufacturing sites and serves to increase a knowledgeable and ready service sector. This freedom of movement of firms due to globalization coupled with technological advances has been instrumental in bringing world economies and markets closer and much cheaper to transact business. * In terms of information-communication technology, manufacturing benefits have been realized through reduced costs for information. Transportation costs have dropped in relationship to importing and exporting manufactured goods. Technology and communication advancements have also reduced the time to receive and respond to changes and other important product information and educational inputs. This changing emphasis on technology has produced a highly educated and productive workforce and service industry. This coupled with manufacturing can only lead to a more efficient workforce and better manufactured products in the world market. * Within the political arena, globalization and technological advances has broken down the divisions traditionally known as the first world, second world, and third world economies into what seems like a first world economy driven by technology, new access, and a desire to participate in a global market economy, shifting social and cultural ideas and systems. Since globalization seems more universal and objective, there will be less of a focus on power differentials between and among manufacturing and service sectors in countries but more of a diversified market with opportunities for all world economies to participate, benefit, and grow their various manufacturing and service sectors. Technology and globalization has meant that political agendas could be viewed as more neutral and fair. However, one must keep in mind that some countries have dominated the globalization and technology arenas such as North American, with 77.4% of the world’s internet penetration rates, followed by Ocenia/Australia (61.3%), and third by Europe (58.4%) (The Levin Institute). * One very important outcome of globalization and technology is certainly rooted in business itself. Market globalization has had a tremendous impact on banking, financial transactions, and institutional partners and players. The manufacturing and service industries alike benefit from business globalization because markets reflects the growing interdependency and the multinational nature of sourcing, manufacturing, trading, and investment activities (Alli et al., 2007; Onis, 1997). Globalization has linked countries, their markets, their products, and their people together in a manner never seen before. Technology has played a tremendous dual role with globalization in this area by making communication quicker, easier, more efficient, standard, and cost-effective (The Levin Institute). * Lastly, globalization and technological advances has effected education. Product enhancement, improvement, and knowledge are the cornerstone of manufacturing and supplying an intelligent service sector. Enhanced education due to technological and globalization changes has resulted in better trained managers, buyers, sellers, and consumers. To operate successfully, managers must develop an understanding of the government sector, and must also understand regulations, cultural nuances, and the activity of various world markets. An enhanced technological social marketing platform has not only allowed for friendly connections but have opened the door for business, markets, and global franchises to market and sell products all over the world simultaneously and in a manner never witnessed in previous societal revolutions. * As presented there are a number of opportunities related to technology and globalization of the manufacturing and service sectors. However, there are challenges to consider in a global and technological market economy and its impact on the manufacturing and service sectors. One of the obvious challenges to do business in a global and technological market is rooted in the need to establish productive partnerships with other organizations domestically and internationally. With this global strategy are the costs, complexities, and risks associated with these types of business ventures. Alli and colleagues (2007) note that issues related to intellectual property rights and obligations associated with technology transfer can be problematic as well. * Onis (1997) contends that while globalization and technology has led to the efficient allocation of resources for national governments, it has led to the removal of the nations’ ability to develop and implement their own policies. This lack of means to enforce, regulate, and understand the intricacies of trade policies have caused macroeconomic damage. Less developed countries are at particular risk to opportunistic wealthy countries and may fall victim to this type of unfamiliar economic market play. These types of challenges drastically affect both the manufacturing output of a given country but also adversely affect their service sector. * Further, globalization and technology can heighten the effects of poverty, inequality, and discrimination in less developed and business savvy countries. In order to avoid such calamities, developed countries should work very closely with developing countries to ensure trust and transparency in operations of technology transfer, education, goods, services, and overall policies and procedures. Globalization and technological advances also raises many political issues and concerns thus; joint ventures must be entered into with understanding and clarity of advantages and disadvantages. While there exists many challenges, the trend is moving toward more technology and globalized world economies and markets. This new way of doing business within the international community will only enhance our manufacturing sector and continue to boost a strong, educated, and knowledgeable service sector. * * * * * *

References

Alli, A. M., Winter, G.S., & May, D.L. (2007). Globalization: its effect. International Business & Economics Research Journal, 6(1), 89-95.

Onis, Z (1997). The political economy of Islamic resurgence in turkey: the rise of the welfare party in perspective. Third World Quarterly, 18(4), 743-766.

RAWOO (2000). Coping with globalization: the need for research concerning the local response to globalization in developing countries. Rawoo. The Hague.

The Levin Institute. Technology and globalization. Retrieved from: http://www.globalization101.org.

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