Technology's mixed blessing

Date: Monday, March 19, 2018
Source: Barclays

 

Technology has always played a key role in globalisation, whether through large reductions in transportation costs or through the rapidly increasing power of information and communication technologies.

In earlier times, globalisation was driven by technologies that reduced transportation costs, such as railways in the late 1800s and commercial flights and standardised shipping containers after World War II. It became easier to transport more goods across more borders and over longer distances.

Since 1990, advances in information and communication technology have allowed corporations in advanced countries to shift production processes to low-wage emerging market economies.

As a consequence, emerging markets became deeply integrated in the global value chains operated by multinational enterprises. Trade is no longer centred on final goods produced in one country and consumed in another, but on intermediate goods shipped back and forth as part of multi-stage, multi-country production processes.

While these trends are unlikely to slow down in any deglobalisation scenario, technological progress is hard to stop. Indeed, technology itself, notably 3D printing and robotics, could significantly change or even reverse some of the factors that define hyperglobalisation.

3D printing could allow goods to be manufactured close to consumers, and even within households. Large-scale manufacturing that has been outsourced to EMs where labour is cheap could return to developed markets and be distributed among multiple small producers.

Robotics: Traditionally best suited for repetitive tasks in high-volume production, new-generation “collaborative robots” (co-bots), created with help from innovations in the gaming industry, are cheaper, can work safely alongside humans, and be easily reconfigured to perform different tasks.

Rise of the machines

 

Global robot use spreads as prices fall...

 

 
 
...and new collaborative robots will put more pressure on manual labour.
 
 
 
While these technologies are unlikely to affect the outsourcing of information-based tasks, they will have a significant effect on any manufacturing-based value chain. At the same time, technology-driven deglobalisation could disappoint those who hope to bring manufacturing jobs back to advanced economies, as increased automation makes those jobs redundant.

 

Click here to read the entire article from the original source.

 

BROWSE MORE ARTICLES

E-MAIL TO COLLEAGUE

NOTIFY ME WHEN NEW ARTICLES ARE POSTED

SOUND FAMILIAR? HAVE A SLIGHTLY DIFFERENT ISSUE? CONTACT US

Have the News Delivered to you

Like what you see here? Why not let us send it directly to you?
Sign up to receive our Weekly Industry Newsletter, a compilation of all news articles that matter to you and your business.