2 - Economic Globalization and the Development of Poor Nations

Summary

The era of globalization is set off from the past by the distinctiveness of its technologies. As Thomas L. Friedman puts it, globalization is driven by “computerization, miniaturization, digitization, satellite communications, fiber optics and the Internet” (Friedman 1999, 8). Because they “permit instantaneous communication among the far-flung operations of global enterprises,” these technologies, in conjunction with the development of new materials and production processes and improvements in sea and air transportation, have “created and mandated greater interdependence among firms and nations” (Stever and Muroyama 1988, 1). With these innovations, the potential for global economic integration is greater than it has ever been before.

But the spread of globalization is not, as Friedman believes, as inevitable as the fact that “the sun comes up every morning” (Friedman 1999, xviii). Rather, the global spread of production requires that beyond the availability of the new technology two additional conditions be satisfied. A liberal international trading system is needed, as is a relatively well-educated labor force. When those are in place, the new systems of communication, information processing, and control allow profitable production to be carried out virtually anywhere: no country is so remote that investors will be dissuaded by location alone. Because that is so, modern production methods can be introduced into countries that previously were by-passed by economic development.

By conceptualizing globalization in this way I am differentiating my usage from that of Kevin O'Rourke and Jeffrey Williamson.