Introduction
While the current wealth of many nations shows bigger growth than ever before, the instability and turbulence of the global order are also at their peak. Various factors, acting together or independently, have contributed to either enhancing or aggravating the uncertainty of the worldwide economy (Burlacu, Gutu, & Matei, 2018, p.122). Research on the effects of the technological revolution on the international economy is growing significantly. Technology has changed how firms and countries organize production, invest capital, manage processes, and trade goods. Globalization makes the welfare gap between two nations to slim when the utilization of goods generated in diverse sectors are net complements (Matsuyama, 2019, p.501). For instance, erudite information technologies allow instantaneous communication among systems of far-flung set-ups of international enterprises (Matyushok, Krasavina, Berezin, & García, 2021, p.7). The implications of globalization through technology happen in several ways such as capital outflow from emerging economies to industrialized countries, growth of new markets, and the growing insecurity within the financial marketplaces.
Countries such as the United States have always made consistent efforts to modernize several macro-economic structures since 1945. The strategy is anchored in the belief that increased investment in technology has labor market productivity and by extension the global economy (Matyushok et al., 2021, p.9). Revolutionary innovations in the field of information technology in the past few decades have not only increased productivity rates but also hasten economic development in the U.S. context, and in other countries (Kobrin, 2017, p.161). Therefore, technological globalization has far-reaching implications, which can be positive or negative (Buckley, 2018, p.4). For example, the United States is attempting to reserve a globalization model anchored in Americentrism, which not only seeks to preserve the success of the nation but also uphold its global authority.
In attempts to explain the impacts of technological change and the extent to which firms and countries cope with the situation, previous studies have largely based their methods on the model of dynamic capabilities. The concept refers to the ability of a firm to create, modify, or extend its resource base. In recent years, the theory of dynamic capability has been dominant in elaborating organizational adaptation to technological globalization (Konlechner, Müller, & Güttel, 2018, p.190). Therefore, building and applying this concept has remained the default method to investigating the extent to which technological change affects the economy. However, documentation of key dynamic capabilities continues to pose an exacting challenge (Michie, 2017, p.7). Moreover, how this concept precisely results in changes remains a mystery. Consequently, this research seeks to elaboration on how exactly technology influences the global economy.
Review of Existing Literature
The review assesses previous research on technological changes and their impacts on the global economy by evaluating the extensive and heterogeneous literature on the topic with particular prominence to the dynamics and implications. The synthesis extends existing knowledge by incorporating the sub-processes in the paper for enhanced analysis of the topic. Burlacu et al. (2018, p.122) emphasize the policy primacy, positing that the initial trend of globalization has been completed not only due to lack of endogenous shock but also from forces resulting from the political response. The reaction has been generated by the growing inequality in the advanced economies. I both decisions and policymakers fail to consider the intense effects of globalization on the global economy, such a response might occur again. The authors’ work accentuates that globalization infers a multidisciplinary concept in which production, firms, markets, and the domestic financial system become interlinked within the global arena. The above definition of globalization creates an impression of the economic correlation that embraces this phenomenon. For purposes of simplicity, people should restrict the discussions on the implications of technological globalization on the global economy to just factors of production.
Globalization was in the business, political, and academic circles the buzzword in the 1990s, denoting an increasing diversity of supplementary connotations, associations, and mythologies. David and Grobler (2020, p. 1395) also assess the remarkable role of globalization in its numerous conceptions in spurring economic progress in the contemporary world. The authors have cast a substantial and principally skeptical expression at some of the occasionally exalted and intentional remarks made in the name of the impacts of technological globalization on the worldwide economic situation. Some materials reinforce the leading contribution made by the media towards comprehending the impacts of globalization and its effects on the economy (David & Grobler, 2020, p.1395). The authors convincingly believe that globalization might not have surfaced without the contribution of the media.
Right from prehistoric times, humanity has utilized the environment to solve, explore, and even globalize the world in manners that might have not attracted significant attention. In modern days, the media have gradually created society smaller as cultures and nations continue to grow in contact. Marshall McLuhan a few decades ago predicted that technology would change the world into some global village (David & Grobler, 2020, p.1395). The overall impact of technological globalization on the international economy has been impressive to a certain extent.
Konlechner et al. (2018, p.190) highlight technological advancement as the major cause of invention and reconfiguration processes in many firms. Explicitly, new technologies such as miniaturization, microelectronics, supply chains alongside their basic ICT systems, social networking applications, or cyber-physical systems immensely shape economies on the global scale. Firms are progressively under pressure to manage dynamics, discontinuities, and complexity to remain competitive. Therefore, developing and sustaining proficiencies for adaptation and governing change becomes an essential feature of organizations. The dynamic capability view concentrates on how companies and nations can transform their value-creating resources in a given length of time. Moreover, dynamic capabilities are the central way of coping with technological globalization or even persuading such change. However, despite the big practical relevance to the notion of dynamic capabilities, there is a dynamic conversation regarding the inquiry as to how they function.
Technology has facilitated huge populations to be visible on the global map and nearly every nation across the world has embraced technology in numerous ways. Reflecting on the 21st century, demographers forecasted an accelerated and dramatic swell in the cultural diversity in the world’s populace, which would happen and reflect in its aging, poor health, and high mortality in certain regions. Globalization is a special phenomenon that needs the advancement of human interconnection, expedited completely by technological development, increased international trade, and national cultures extending beyond the borders. Globalizations also thrive from transposed goodwill of the populace coupled with the desire to possess and know much knowledge and goods (Hernández-Perlines, Cisneros, Ribeiro-Soriano, & Mogorrón-Guerrero, 2020, p.3). The authors also note that globalization is a multifaceted process that occurs internationally and redefines the configuration of the world. The researchers also highlight globalization phenomenon contains three effects: technology, economy, and politics.
According to Biryukov and Romanenko (2017, p.372), the role of organizations has become well established and widely recognized in recent years towards the growth of national and global economies. Many recent pieces of research have pragmatically demonstrated that the technological characteristics vastly influence the development of economic changes, national economy, innovation, and knowledge administration at organizational and national levels. In the same course, the comprehension of the interrelations process between economic behavior, culture, and institutions may vary greatly, which leads to the application of alternative approaches such as holism and individualism.
Methodology
A systematic literature assessment was conducted to identify core resources for analysis. The review focused on materials authored in the last five years with the search title ‘globalization technology and impacts on the global economy. Based on the results, papers that did not focus on technological innovation, technological change, or technology management will be excluded. The analysis also integrated backward and forward searches to ascertain that every significant contribution to the research topic is covered. In addition, the search availed the information collected from contemporary business developments from various nations.
Overall, adhering to this process led to a sample of about 30 papers documenting the linkage between technological globalization and the global economy. For the succinct synthesis of the outcome, the literature review facilitated the appropriate identification of ambidexterity, absorptive capability, and technological advancement as the three major theoretical lenses. These frameworks offer deepened insights into the contribution of dynamic capabilities on technological globalization towards facilitating a purposeful international economy (Yusupova, 2017, p.386). Therefore, the analysis focused on the core role of globalization in the aspects of technological advancement, absorptive capacity, and ambidexterity on their influence on the international economy. The remainder of the work provides a conclusion on the discussions on the research topic.
Discussion
Shift in Capital Outflow
The capital expenditure from developing markets to advanced countries is an emerging concern. Mertens (2018, p.4) availed statistics about the volatility of technological economic advancement in rich and developing countries in attempts to analyze globalization through technology. The analysis also focused on the effects of economic insecurity and instability at the global scale while considering a universal viewpoint on international corporations from emerging economies, especially firms shifting to advanced countries. Moreover, the authors assessed the connection between insecurity and economic instability at the international level. The scholars considered an international standpoint behind transnational firms from developing nations, especially companies moving to the advanced economies. Research identifies three elements that impact the observable fact of multinational firms developing nations: competition, globalization, and strategic preferences regarding future growth.
Until recently, growing markets contributed immensely to the worldwide center of commercial advancement. Nonetheless, going by the arrangements of 2015, outstanding size of capital discharges from emerging marketplaces might register double fall of economic activities from some nations. Rapid population increase, substantial growth in life quality, and regular economic development facilitated emerging economies to become nations with attractive perspectives and opportunities. Countries are increasingly deploying artificial intelligence in various parts of the economy (Bughin, Seong, Manyika, Chui, & Joshi, 2018, para. 4). Nonetheless, not everything is irrevocable, and based on emerging statistics, upcoming markets might draw nearly fifty percent of exogenous investment regarding global financial flows. Some countries that might become attractive include India, Russia, and Brazil coupled with the regions of the Middle East and Africa.
The Shift from Raw Material Marketplaces to Technologies Markets
The prevailing trends in the growth of the global economy encompass rapid intensification of technological processes, which accelerates yearly. The globalization of the international economy is an intricate multi-dimensional procedure that triggers more interest among researchers (Matyushok et al., 2021, p.5). Some scholars have summarized the newest phase of continuing studies about tactical management of globalization within the service industry (Matsuyama, 2019, p.501). Some of their researches have emphasized the contribution of technology in the global expansion of industries. There is a common consensus that an economy reliant on unfinished products as the major basis for its gross domestic product cannot stay competitive and therefore, has no future (Batt, 2018, p.2). The assessment of current global markets demonstrates that the cheap material period has started to rule most markets (Matyushok et al., 2021, p.19). From around 2012, global raw material prices have been declining steadily and the trend might last. Regarding the cheapening of raw materials coupled with the transition of least advanced nations to the neo-industrialization, a steady pattern of the growing role of technology in market development has been in existence.
Recent studies show that only effective utilization of contemporary technologies can facilitate up-to-date expansion frameworks, which expedite nations’ transitions to bigger technological arrangements. Countries globally have increased investments in research and development and origination is the factor of innovative configuration with the largest affirmative consequence on this direction (R&D Magazine, 2019, p.2). Within the technological market, there is also a huge demand for services worldwide. Population income development, tourism infrastructure growth, and transportation advancement resulted in an enhanced share of tourism within the spheres of global export services. Lately, insurance, financial, consulting, and audit facilities are the most vigorously growing services.
Progression of New Markets
Studies on developed markets depicted inefficiency regarding monthly returns as opposed to the longstanding view that industrialized economies tend to be effective when matched with emerging ones. Part of the fronted reasons includes lengthy presence, enhanced maturity, and integration of technological changes (Biryukov & Romanenko, 2017, p.374). The authors established that neo-industrialization is the dispassionate procedure of creating an inventive industry model anchored in superior technological structures. The digitalization of society and the establishment of smart cities and intelligent economies are procedures that require technological inputs. According to Berezin, Sergi Bruno, Gorodnova and Andronova (2019, p.252), intelligent cities enhance financial development globally by transforming into a smart economy, infrastructure, technologies, governance, and human capital to increase economic headway and sensible usage of existing resources.
Selim, Yousef, and Hagag (2018, p.185) emphasized the notion of intelligent infrastructure originated from the conception of a smart town labeled an inclusive system having diverse aspects such as economy, people, and ICT systems. The smart city idea will spur economic growth in the areas of implementation. IT sector is promptly evolving and employing modern digital machineries, which currently embody the newest platforms for novelty and business development (Krasavina, 2019, p.2). Therefore, technology-driven growths such as the utilization of ICT infrastructure are impacting all cities globally, regardless of their decision to either invest or integrate the smart city idea into the governance plan.
The Growing Insecurity in Financial Markets
The level of improbability witnessed within the economic sector is triggered by the turmoil within the business landscape and development in the advanced economies’ public debt that is comparable to GDP. For instance, Japan, in 2019, recorded the biggest administration debt standing at about 234 percent matched to the GDP (Matyushok et al., 2021, p.8). Other countries such as Greece, Italy, Portugal, and the U.S registered a public debt of 182 percent, 127 percent, 117 percent, and 109 percent respectively (Matyushok et al., 2021, p.8). In other countries such as the United Kingdom, France, Belgium, and Spain, the extent of government debt nearly touched the GDP size. In scenarios of instability and uncertainty, the biggest transnational companies increase assets, especially in the technological sector, consumer goods, and services (Ishrat & Rahman, 2020, p.754). Contrarily, instability and insecurity in the financial sector aggravate the draining capital from developing economies (Batt, 2018, p.2). For example, by 2015, emerging markets encountered a total capital outflow after a very long time.
The investigations on the general impression of the effects of technological globalization on the financial markets, with insights of findings sources of potential vulnerabilities and strengths, are comprehensive. Konlechner et al. (2018, p.193) analyzed the risks and benefits of economic stability linked to technological globalization in financial markets. They established the significance of global time to avert instability within the whole financial sector and its detrimental ramifications for the universal systems.
Conclusion
The paper has comprehensively synthesized the empirical and conceptual findings to understand the implications of technological globalization of the global economy. The research identified the growing trends of capital outflows from developing economies, insecurity within the financial sector, progress in new markets, and the shift from raw material marketplaces to technology markets. Until recently, the account of worldwide firms predominantly concentrated in the industry. However, the narrative has changed and currently, the reality is seen on the influence of technology by invading nearly every aspect of commerce. For instance, technology raids every business area such as advertising, healthcare, finance, education, manufacturing, and all other sectors of the economy. It has become closely intolerable to rival technology firms with established global presence.
Annually, numerous technological innovations enter various markets globally. The marketplace can rapidly utilize these emerging technologies and disseminate to situations where new products and services reach intended users in the shortest period after breakthrough. As novel technologies are being established at a rapid rate coupled with record-speed market adoption, it appears the future might come at a swift speed. Lastly, reflecting on how a company or a nation with technological threats and prospects combined with robust technology management might serve as a central stage in enhancing its competitive position.
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