Global commercial economies have expanded dramatically over time so that it is normal to go to a store and see a product made in one country and assembled in another country. However, recent demand expansion and improved commercial interconnections have been achieved over time by tools such as enhanced technologies. In particular, commerce between nations began a long time ago with trade-offs between neighboring nations for progressive trade across the oceans. In the 16th and 17th centuries, commerce moved from barter to mercantilism, which would later be replaced by liberalism in the late 17th century. The works of Adam Smith particularly related to specialization in production shaped the economic situation of global trade as countries endeavored to concentrate on the production of goods that needed the least cost of production (Friedman p.3). David Ricardo’s economic concept of comparative advantage also shaped international trade in its initial years. In the wake of the 19th century, countries were moving towards professionalism and upholding economic liberty by eliminating quantitative restrictions and reduction in customs duties.
However, the international trade growth would experience a significant blow during the First World War when nations put up wartime controls that also restricted imports. The outcome was raised tariffs and customs by individual governments. The need to reduce economic pressure saw the inauguration of the World Economic Conference in 1927 that led to the establishment of Multilateral Trade agreement that was later followed by General Agreement on Tariffs and Trade (GATT). Notably, the great recession of the 1930s provoked economists and policymakers to seek practical measures that would address the situation since the old theories were not as helpful. In this modern world today, factors affecting global commercial markets are well understood. One of the factors that have influenced worldwide trade is improved technology. In examining how modern technology affects global markets, it will be evident that technology plays an integral part in this trade.
The use of computers in local and international businesses has increased efficiency through the reduction of operational costs. Archer, give such an illustration
Parallel computing is an area of computer technology that has experienced advances. Parallel computing is the simultaneous execution of the same task (split up and specially adapted) on multiple processors in order to obtain results faster(p.1)
When a company utilizes advertisement on the web as opposed to the traditional ways of local dailies, radio, and television, the coverage is higher, and the costs are relatively lower. Additionally, the company has absolute control on the length of advertisement period without incurring unnecessarily high costs. The internet approach to marketing also allows clients to make online inquiries and order products from many parts of the world. For instance, a person in Africa can place an order from an electronic online company in the United States and have the product delivered within seven working days without unnecessary hustle. Such convenience has increased the clientele base of most companies but also created a highly competitive business environment such that only the effective ones survive. As such, companies are striving to offer the best client experience within minimum costs in the highly unpredictable business environment. The outcome of proper planning is increased sales and growth of companies. Notably, unlike the analog era when the establishment of businesses outside one’s country was left to multinationals because of the high capital outlay, with technology the start-up capital for a business is significantly lower attracting more players in a particular industry. Increases producers in a specific sector reduce market control of individual companies and in the long run work for the best of customers since exploitation is minimized.
Technology has enhanced the decision making of managers through the provision of modern tools necessary to make a proper decision. The internet is a resource that has updated information on a regular basis for professions across the board. Thus, one can access the information regarding the best practices, learn about the best ways of increasing productivity and also access real-life case studies that will enhance the company’s well-being. As such, the geographical distance barriers, especially in developing countries, are eliminated. In fact, organizations can access the resources required to speed up transactions and provide international customer experience in service provision. Additionally, companies in the global markets can adopt world-class standards because of available research studies. The Internet allows businesses to access expert information from different specialists without having to buy books. Notably, the available data is mostly free, and even when charges are involved, they are minimal. Therefore with proper strategies, a company can scale higher since most barriers have been eliminated.
The use of computers in international trade has enhanced the possibility of starting a company in a different country without unnecessary hustle unlike when technology was minimal. For instance, the internet will allow a company ample time of gathering information to know about the culture, trends, spending habits, income levels before leaving their mother country. With such information, they can travel to the country shortly to know how things are on the ground and even conduct and analyze market information before the establishment. Once, all legal and company requirements are in place, the operation of the business will hinge on technology. For example, for increased performance and acceptability by the residents, the new company can hire most of the employees from the community and receive daily updates on the progress of the company. In fact, the weekly or monthly meetings could be held online through video conferencing thus saving cash and allowing product availability in a different country. Videoconferencing not only saves money but also increases business relationships among key players. Notably, the utilization of modern technology will also increase productivity and lower costs since people can adopt different working schedules including working at night. For example, the company could have a physical store but also be involved in e-commerce. The utilization of e-commerce ensures that employees can work from a place in the world as long there is internet connectivity. As such, only a few will be in the office at any given time, and others could work from the comfort of their houses even at night. Such flexibility in the working schedules, as opposed to the traditional schedules, offers great fulfillment and motivation of the employees resulting in increased productivity. Consistently improved performance, in the long run, will see the company grow and expand to other countries. All these benefits all attributable to enhanced modern technology and flow of information. In fact, transnational corporations can make up heterogeneous teams of people working together but in different parts of the world allowing diversity to enhance productivity positively.
The use of technology in the international global market has a positive correlation with increased creativity and innovation in the production of goods and services. Since the international market is highly competitive, a company’s survival is dependent on how well it offers differentiated products to the market that are unique and allows the consumer to enjoy an exceptional customer experience. As such, companies are seeking talented individuals whose products could stand out in the traditional markets as opposed to standard goods. For instance, there has been an increased demand for conventional products that offer a sense of uniqueness. Also, the international market is seeking commodities that make them feel global as opposed to just local. Thus products like handbags, clothes, ornament, decorating materials are traded from one country to another thus increasing the terms of trade and flow of money.
Additionally, increased technology has also affected the consumers in the global market by giving them essential information that they need in decision making. Since the internet is available, the consumers are more empowered such that they can compare product prices and description before settling on a product and thus increase the probability of making more informed decisions. What this means for companies is that for them to survive in the dynamic digital market, they ought to meet the customer’s needs and carry out regular market intelligence exercises. This has changed how companies operate since they create demand and find a ready market before embarking on the production of a commodity. There is high demand for products that meet the customers’ needs and increased revenue to such companies as opposed to other companies that may take the traditional route of making a commodity first before knowing the demand. Additionally, highly dynamic products that make use of the modern technologies are penetrating the international markets even to perform better than the dominant companies in a particular industry. For example, the demand for Ford automobiles has reduced significantly while that of Tesla grown in the last couple of years. The reason Tesla has done better is that it is meeting the customers’ need and preference for electric cars.
Also, there is an increased demand for fresh vegetables from African continent by the European market something that was not possible several decades ago without technology. Dolan and Humphrey suggest that
Over the past twenty years, the marketing of African fresh vegetables in the United Kingdom has become dominated by large retailers that have adopted competitive strategies based on quality, year-round supply, and product differentiation. This has led to a dramatic change in marketing channels, from wholesale markets to tightly knit supply chains (p.491).
The improved technology ensures that farmers in Africa can be able to produce the vegetables under controlled climatic environment to attain international standards. Since the conditions necessary for vegetable production are more favorable in Africa than in European region, such business relationship produces win-win situation given that the demand for vegetables is not that high in Africa. Because of the prevalence of technology, the marketing and production stages have become integrated. The ability to enter into contractual agreements between producers and marketers has offered stability in the markets since the price is not determined by the vagaries of demand and supply that fluctuate much mainly in the agricultural world.
The use of modern technology has resulted in globalization such that the international trade has been institutionalized with policies supposed to be applicable globally. However, such an arrangement has created economic inequality between the developing and developed countries particularly from the international trade and agreements thereof. Citizens of developed nations and their governments continue to thrive and grow economically at the expense of the government and people of developing countries in particular through the World Trade Organization (WTO) agreements that are biased and work against the third world countries. The policymakers and critical decision makers in the WTO hail from developed nations such that they are prejudiced against developed countries especially on matters related to food security, nutrition, and agriculture. For instance, one of the policies that is in place is that governments are not allowed to offer their farmers subsidies as that will have negative implications on trade. However, the US government has continued to provide massive subsidies to the farmers, alleviating poverty and increasing the economic well-being of the farmers. Unfortunately, farmers in developing nations are languishing in poverty as the extent of government support is limited by the WTO requirements and rules. Collier and Dercon (p.93) state that despite the growth and development in many nations economic status, developing countries have remained in poverty and agricultural markets thin. Vertical integration and penetration of private players in the agricultural sector are limited such that exploitation of farmers has continued to prevail.
Since food consumption is continuous and progressive with the increasing population, enhanced technological advancement should have occurred such that the price of agricultural price increase accordingly. However, the farmers who do most work and farm against so many odds in the era of climate change and global warming live sometimes unpredictable lives even below the global poverty levels. Cheru (p. 1268) argues out how WTO policies under capitalism state that production is for trade and not consumption. As such, nations should allow importation of goods in their countries even if the climate allows such production. Such has led to dumping that occurs in countries like Kenya which can produce its own sugar but is forced to import from other nations like Brazil. The outcome is that the local farmers face low prices of locally produced sugar limiting their ability to grow and expand or even to adopt the new technology for better production. The case of tea and coffee in Kenya is at stake given that farmers are paid peanuts after harvesting and selling their unprocessed products. However, they are exported to UK where they are processed, packaged and exported back to Kenya and sold at high prices under WTO’s watch. The beneficiaries are the developed nations at the expense of farmers in Kenya. Additionally, areas like Korea, because of the dumping and availability of cheaply imported goods, farmers are unable to get reasonable income such that most of them are deserting countryside for the urban areas where they can attain even casual employment (Lele p.458). If globalization were not absent, nations would only form trade unions amongst their neighbors where power disparities are non-existent such that things like economic situations like comparative advantage would be utilized.
In conclusion, modern technology has impacted the commercial markets positively but has also had adverse impacts on some players in the market. Technology has allowed increased commodities available, e-commerce that results in increased sales and reduced operational costs, better customer services and improved motivation among employees in international companies. The enhanced integration of the global markets gave rise to World Trade Organization that has worked at creating economic inequality between developed and developing countries. Dumping has been possible and resultant reduced trade, and high poverty levels have been experienced in some developing nations that export their agricultural products to the US.
Archer, Charles J., et al. “Improving efficiency of a global barrier operation in a parallel computer.” U.S. Patent No. 9,459,934. 4 Oct. 2016.
Cheru, Fantu. “Developing countries and the right to development: a retrospective and prospective African view.” Third World Quarterly 37, no. 7 (2016): 1268-1283.
Collier, Paul, and Stefan Dercon. “African Agriculture in 50Years: Smallholders in a Rapidly Changing World?.” World development 63 (2014): 92-101.
Dolan, Catherine, and John Humphrey. “Changing governance patterns in the trade in fresh vegetables between Africa and the United Kingdom.” Environment and planning A 36.3 (2004): 491-509.
Friedman, Milton. “Adam Smith Declares an Economic Revolution in 1776.” THREE in ECONOMICS (2015): 3.
Lele, Uma. “Doubling Farmers’ Income under Climate Change.” Agriculture under Climate Change: Threats, Strategies, and Policies 1 (2017): 458.