Lecture Notes: Future Globalization

Introduction

• Presenter: Tanya Cushman
• Aim: Change the perception of globalization and raise awareness about its future.
• Current imagery of globalization often limited to goods (e.g., cargo ships).

Current State of Globalization

• Traditional view: Focus on physical goods, things we make.
  • Driven by arbitrage: companies exploit differences in production capabilities across countries.
  • Easier to ship goods than services across borders.

Barriers to Service Globalization

• Services require both provider and buyer to be in the same place (e.g., personal service jobs).
• Current globalization primarily involves goods because:
  • Shipping services across borders is technically challenging.

The Role of Digital Technology

• Digital technology is changing the landscape of globalization.
• Introduction of Telemigration:
  • Remote workers in one country providing services in another.

Economic Incentives for Telemigration

• Significant salary differences across countries create economic incentives:
  • Example: U.S. vs. Polish accountants.
• Workers can potentially save companies money through remote service provision.

Factors Easing Telemigration

1. Domestic Telecommuting:

   • Increased remote work arrangements leading to global hiring of freelancers.

2. Online Freelancing Platforms:

   • Platforms like Upwork facilitate the hiring of foreign freelancers.
   • Millions of freelancers registered from over 100 countries.

3. Machine Translation Advances:

   • Significant improvements in translation technologies.
   • Tools like Skype Translator and Microsoft Translator open new opportunities for communication between languages.

4. Advanced Telecommunications:

   • Telepresence technology allows remote workers to interact as if they were in the same location.
   • Telepresence robots enhance the feeling of physical presence in meetings.

The Speed of Change

• Digital technology is advancing rapidly:
  • Example: iPhone's processing power compared to the Apollo 11 computer.
  • Each iteration of technology is exponentially more powerful leading to faster changes in globalization.

Conclusion

• Future globalization will focus more on services (things we do) rather than just goods (things we make).
• Increased opportunities for competitive citizens but also heightened competition for less competitive ones.
• Overall, a mix of anxiety and excitement about future globalization is warranted.

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Key Takeaways:

• Reconsider the traditional views of globalization focused on goods.
• Prepare for the rapid advances in service globalization driven by digital technology.
• Embrace the opportunities while remaining conscious of the competitive landscape.