Digital Technology and International Trade as Drivers for Globalization

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This essay aims to show how Digital Technology and International trade, having been the driving forces of globalization.

Globalization refers to the trend of international trade, investment, Digital technology and also outsourced manufacturing the link economies between several countries together. Because of this giant booming, I will be doing this essay based on what I have learnt of the forces driving of globalization, the story behind and how is it been looked at the society in business as well as in finance, this contemporary term refers primarily to the economic integration of global markets, but the name is also used to describe sociocultural integration between countries.

“Digital technology and international trade are the driving forces behind globalization.”

    This assignment aims to analyse the digital technology and international trade as the driving forces behind globalization.

      It is called globalization the political, economic, social, cultural and ecological process that is taking place on a planetary level and has both positive and negative aspects. It presents advantages for the economic and technological development for small, medium and large business, and it is also can be defined as the intensification of worldwide social relations which link distant localities in such a way that local happenings are shaped by events occurring many miles away and vice versa, Giddens (1990, P.64).

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     The main goal of globalization is to give organizations with a competitive advantage through lower manufacturing operating costs and the gain of more products, services and consumers. One way of doing this is through international trade, the opening of additional markets and access to new raw materials. For that Yotov (2012) emphasise that the effect of distance on international trade are measured relative to the impact of distance on intra-national trade, by employing a set of countries specific manufacturing trade.

     This type of phenomenon can now be observed worldwide, with multinational corporations in manufacturing, buying and selling products around the world.

For example, a car company based in Asia continent (Japan) can, have parts of the cars manufactured in several other developing countries, and then send the parts to another country for assembly to then sell this product already finished to the most varied countries of the world.

     Reddy (2009), cited that as one of the results of globalization, technology, has become a key platform of competitive advantage both for nations and businesses, and technology has changed the patterns of technology transfer and had implications for technological capability building, particularly in developing countries.

     One of the factors responsible for the profound changes in the world is digital technology. Thus, with the dynamics of innovation, digital technology is essential for the development of the global economy.

Castells (1999) argues that, according to historians, there were at least two industrial revolutions: the first began shortly before the last thirty years of the eighteenth century and the second, about a hundred years later, whose prominence is for the development of electricity and the internal combustion engine. In these two moments, a period of rapid technological changes is clear and unprecedented. A set of macro inventions covered the way for the emergence of microdevices in the fields of agriculture, industry and technology, (Castells, 1999, p.71).

     After the 60s, during the technological revolution that began at the end of World War II, the digital Society was created, which changes, in a short period, various aspects of daily life. Werthein (2000, p. 71) points out that the digital expression society has  used in recent years.

    Digital technology is a dominant factor for development. They influence social life as well. The company establishes contact, directly or indirectly, with new technologies when, for example, we watch television or use online banking etc. Another highlight of digital technology is related to the teaching process. The Technologies have made possible the use of the communication tools in the educational segment allowing the beginning and the rise of Distance Education. Digital Technologies create a virtual world around us that seem real to people because of the attributes that define the thing that is played back in recognisable human form, (Prabhu, 2015).

     Arpanet was the first computer network and went live in 1969, connecting its first four nodes, that is, American universities. In the 1980s, Arpanet ended its activities and gave way to the Internet. From there, the Internet starts for its international diffusion, without frontiers or directions. Thus, as the network expanded and gained more followers, other Internet-related technologies were created. By 1990, the “uninitiated” still had difficulty using the Internet and the transmission capacity was still very limited, at that time, a new application was created, the World Wide Web (www), the idea of hypertext4 (Hypertext Markup Language (HTML) and the division of sites in sites, Abbate (1994).

     The internet is a significant contributor to globalization, not just technologically, but in other areas such as cultural exchanges of the arts, global news networks such as the BBC, or CNN, contribute to the knowledge. Cell phones connect people around the world like never before. About 60% of the people in the world use cell phones.

     Productivity, continuous innovation, and technological advances have seen since the 1980s as the driving forces of regional economic development (Nijkamp, 1987). Consistent with the assertion that more developed territories are more conducive to technological progress, it argued that the emergence of technological change (innovation) leads to regional development.

      Digital technology contributed to the expansion of the exercise of citizenship by increasing the interaction between citizen and government through faster and less bureaucratic channels of dialogue. The digital means of information dissemination also facilitate the social control of the government, giving greater transparency to the public administration in the three levels. Another strand of discussion on the technology and development dichotomy centred on the determining importance of technology in local performance. Thus, the application of the most advanced techniques must be boosted even in poor regions where the production of innovations is unlikely.

     With its material basis in the information revolution (also called the third technological revolution), the process of globalization has brought profound changes in the sphere of production, in labour relations, in national and international trade, in finance, in the political field and in many aspects of social life (Schaff, 1993; Lojkine, 1990, 1995).

     At the same time, the new technologies have influenced the simplification of manufacturing operations, hence the complexity of design and marketing, the activity for process and product innovations. This expressed that the more advanced conversion of science into a productive force, into work that creates value. Castells (1993)

     The idea that received a well-funded challenge from (Castells 1993), nothing that the services category has used as a residual category, in which almost everything fits: from the operation of a computer to the routine work of cleaning. Cohen (1993), in turn, an emphasis that many high-tech services are extensions or complements of industrial activity. However, erroneously, current statistics distinguish and separate them. The service sector depends on the industry.  Serves her the more developed a trade, the more it requires services, such as design and marketing. So, what we have ahead is not a post-industrial economy, but a new type of industrial economy or, as Castells prefers, an informational economy.

    Gourinchas (2012) stated that in the twentieth century, the expansion of financial markets and transnational corporations corresponded to the most relevant event regarding the increase of capital and commodity flows in the globalized world. From the 1950s multinational corporations began to direct their subsidiaries to the underdeveloped countries and soon became dominant in international trade.

     The more these companies were growing, expanding their markets, they needed more technology investments and the application of new production methods. These methods have established greater flexibility in product innovation and manufacturing systems to serve consumer markets from different locations and make the best use of space, raw materials and human resources. The transport sector needed to adapt to the new demands to ensure efficient and safe distribution of the goods. (TheresaVeer,2012).

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     The Global economy and technology it has been changing and the driving forces of  globalization, through the interactions between the Geographic, economic and technological, it also can be called Internationalization  because it is the process in which include the amount of increase in operations across borders ( Welch and Luostarinen, 1988) comprising in many different fields and perspectives in adapted positions.

  Seaden (2001) stated that the redirection policies for commercial application technologies present some critical implications for the relative participation of product, process, design, manufacturing, and marketing areas in the forms of government support. Currently, the basis of the technological development of industrial production and international trade is focused on information and communication technologies. The technological revolution promoted by information technology has imposed critical organizational changes in companies and research and development institutions ( R& D).

     The previous Paradigm of inflexible production, intensive in capital and energy, is being

It is focused that virtually all advanced countries have public policies designed to stimulate private spending on research. To varying degrees, governments are directly involved in scientific research and provide incentives for individual R & D projects. A fundamental principle that seems to be becoming a consensus among the governments of these countries is that public policies should be innovation policies and not merely systems, ( Seaden, 2001)

     We are living a new historical era – knowledge-based economy, learning economy, information society – where the economy is most directly and firmly rooted in the production, distribution and use of Digital technology knowledge for the process. Information and communication technologies affect and influence significantly the learning processes that are fundamental to the organization of information, which is, in turn, the essential activity for the new generation of knowledge. These processes are also directly related to the globalization process. Based on the qualification of the concept of globalization and a discussion on the locational specificities of the process of generation and diffusion of information and communication technologies, the text addresses the main characteristics of the industrial and technological policies implemented by the OECD countries (Kaul, 1999).

    Globalization is not occurring in an empty space. It is  a broader trend that we may call Internationalization/Regionalization. It is growing the government, deregulation, and the shrinking of social obligations are the domestic counterparts of the intertwining of national economies. Globalization could not have advanced this far without these complementary driving forces. The big challenge for the 21st century is to engineer a new balance between market and society, one that will continue to unleash the creative energies of private entrepreneurship without eroding the social basis of cooperation (Rodrik, 1997).

   Whether it is liked or not, the Globalization does exist. The challenge is to know how to handle it to avoid the adverse effects and the potential that could develop.


   In a general context, this definition of Globalization on digital technology and international trade has resulted from increasing market in international trade and also in cultural exchanges between countries.

   It is also worth mentioning that this term has  referenced due to its ability to contribute to the transfer of wealth to less developed countries.

However, this very present aspect today is also often blamed for job losses in developed nations, as corporations send manufacturing facilities and jobs abroad to save on production costs.

   It is also good worth to mentioning that there are also critics who say that this process tends to weaken sovereignty of the countries of greater relevance in the world economic context.




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