One of the important elements of Vernon (1991) International Product Life Cycle (IPLC) theory is technology, whereby it is a critical factor in the development of new products. Both reasoning stresses the importance of technological development. Nevertheless, Seitz & Hite (2011) highlights that the inappropriate use of technology by the western, developed nations can cause harm to the globe, and the developing countries should consider an intermediate use of technologies. In Brooks, Weatherston, & Wilkinson (2010) reasoning, the use, or lack of use, of technology has a strong influence upon the competitiveness of firms, sectors and nations. The 21st century introduced inevitably the biggest changes, developments in technology, and the effects of organizations. Technological change in Global Economics 1.1. This piece of work is to asses the technological advantages, focusing on energy as a critical technology area, and how it effects the global economics, how it can change the future of the worlds population, particularly the developing countries involvement due to their strategic position in global economics. Both of the previous ascertainment been echoed by Smith (2009), whereby he is argued that the race to use technology to stimulate economic growth, can easily blind us from the risks that technological progress can cause in the environment. However, on the other hand technology cannot change the environment without affecting other parts of it (Seitz & Hite, 2011). Whalley (2011) argues that the primary reason for large inward FDI to China was the access to high quality low cost labor, which can be used to maximize profits with the combination of foreign technology.Īs of Seitz & Hite (2011) technology is what makes economic growth and social change happen, it also help to make things better and easier for the society.
This approach has been referred by Griffin & Pustay (2012), as cost leadership which can be achieved by systematic cost reduction of production and manufacturing, and it should form part of the firm’s international marketing and business strategy. To control the costs, manufacturers mainly looking into four areas, namely: increasing the efficiency of their production processes, tap low-cost labor sources, development of new methods to cut costs and costing products not on an individual basis but as a part of a portfolio of related goods (Rugman & Collinson, 2011, p. Rugman & Collinson (2011) account for that cost is one of the primary concern in manufacturing of goods and services. The development of the emerging economies also a result of the pursuit of low cost labor to keep competitive advantage. Another motive for reach the agreement with investors is to gain knowledge, as Daniels et al, (2012) reveals that Chinese authorities allowing foreign investment in exchange for technology share. This flow of FDI to china perhaps can justify the Chinese company’s ability to break the appropriability theory, which is the idea of gainsay the access to resources for competitors (Daniels et al, 2012). The global FDI inflows sharply declined in the years of 2001-2003 by 41%, 26% and 10% respectively however, China saw an increase in their FDI inflow at the same period by 15%, 13% and 14% (Whalley, 2011). Particularly China had experienced substantial inward investments, especially after 2001 when China joined the World Trading Organization (WTO).
It can be seen at Appendix 1 that the developing economies saw a continuous growth of inward FDI, following the dip around 2000 (Wall et al, 2009, p. With the monstrous growth of China and India, it is important to understand the key factors which driving the dementedly required economic growth (Adekola & Sergi, 2007).Īnother important factor is the increase of foreign direct investment (FDI) on a global scale, which has grown with five times in the same period of 1980 – 2007. This in turn signifies that the exports to GDP ratio increased much faster in the developing economies and now exceeds of the high-income economies figures. It has to be noted that most of this growth in absolute values has been accounted for the high-income economies however, the developing economies increased even further with an average of 6% rose in their global exports within the same timescale (Wall et al, 2009). A rapid growth (a rate of almost 5% per year in real terms) of global export of goods and services has been changed global economics between 19. The global economic landscape is constantly changing.
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