Discuss the potential of digital technologies in bringing structural changes in world economy. In the light of these disruptions, do you agree with the view that reports of end of globalization are highly exaggerated? Opine.
Globalization has led to the integration of national economies into a global market. Access to global products, the transformation of business technologies, and reducing trade and travel barriers have redefined life over the last two-three decades.
Though, due to rising nationalism and protectionism, there are apprehensions that now the era of globalization is over, however it may not be the true representation of the picture. Globalization isn’t ending, it’s changing. The new global economy has emerged, an economy without borders which is dependent on digital technologies. Using technological platforms companies are spreading in connected at the rapid pace. For example, Uber tapped the potential markets in more than 80 countries in just six years.
Present business models are different from past. In the early phases of globalization, some countries emerged as the economic center, for example, UK, however now in the era of digital technologies, however, in later phases of globalization there are various structural changes in the global economic market. For example, digital platforms and advanced digital manufacturing systems have enabled businesses to change their global production and distribution networks by making it possible to operate smaller, more flexible facilities near to end customers, instead of mass production in large plants in the nations with low labor costs.
Because of information technology platforms and networks of local partners, the global market is expanding, both traditional companies, such as General Electric, and relative newcomers business companies, such as Uber, Flipkart are able to gain access to borderless global markets.
Therefore such shifts due to technological platforms are giving rise to a very new and different kind of globalization, which is more-fragmented and the supply chains are decentralized.
Though new globalization model has emerged, it does not mean that era of globalization is over. In fact, the present era of globalization which is dependent on technology has opened more and more avenues in the global market. Therefore the apprehensions regarding the end of globalization era are an exaggeration.