Globalization and the Digital Divide

This chapter reviews the role that information technologies have had in the globalization of our world. As you read, pay attention to the many positive and negative changes that globalization has brought.

The World Is Flat

Thomas Friedman's 2005 book The World Is Flat uses anecdotal evidence to present the impact the personal computer, the Internet, and communication software have had on business, specifically the impact on globalization. Three eras of globalization are defined at the beginning of the book.

  • "Globalization 1.0″ occurred from 1492 until about 1800. In this era globalization was centered around countries. It was about how much horsepower, wind power, and steam power a country had and how creatively it was deployed. The world shrank from size "large" to size "medium".
  • "Globalization 2.0″ occurred from about 1800 until 2000, interrupted only by the two World Wars. In this era, the dynamic force driving change was multinational companies. The world shrank from size "medium" to size "small".
  • "Globalization 3.0″ is our current era, beginning in the year 2000. The convergence of the personal computer, fiber-optic Internet connections, and software has created a "flat-world platform" that allows small groups and even individuals to go global. The world has shrunk from size "small" to size "tiny".

According to Friedman, this third era of globalization was brought about, in many respects, by information technology. Some of the specific technologies include:

  • Graphical user interface for the personal computer popularized in the late 1980s. Before the graphical user interface, using a computer was relatively difficult, requiring users to type commands rather than click a mouse. By making the personal computer something that anyone could use, the computer became a tool of virtually every person, not just those intrigued by technology. Friedman says the personal computer made people more productive and, as the Internet evolved, made it simpler to communicate information worldwide.
  • Build-out of the Internet infrastructure during the dot-com boom during the late-1990s. During the late 1990s, telecommunications companies laid thousands of miles of fiber optic cable all over the world, turning network communications into a commodity. At the same time, the Internet protocols, such as SMTP (e-mail), HTML (web pages), and TCP/IP (network communications) became standards that were available for free and used by everyone through their email programs and web browsers.
  • Introduction of software to automate and integrate business processes. As the Internet continued to grow and become the dominant form of communication, it became essential to build on the standards developed earlier so that the websites and applications running on the Internet would work well together. Friedman calls this "workflow software," by which he means software that allows people to work together more easily, and allows different software and databases to integrate with each other more easily. Examples include payment processing systems and shipping calculators.

These three technologies came together in the late 1990s to create a "platform for global collaboration". Once these technologies were in place, they continued to evolve. Friedman also points out a couple more technologies that have contributed to the flat-world platform, namely the open source movement discussed in Chapter 10 and the advent of mobile technologies.

Economist Pankaj Ghemawat authored the book World 3.0 in 2011 in an attempt to provide a more moderate and research-based analysis of globalization. While Friedman talked with individuals and produced an anecdotally-based book, Ghemawat's approach was to research economic data, then draw conclusions about globalization. His research found the following:

  • Mailed letters that cross international borders = 1%
  • Telephone calling minutes that are international = 2%
  • Internet traffic that is routed across international borders = 18%
  • National, as opposed to international, TV news sources = 95%
  • First generation immigrants as portion of world's population = 3%
  • People who at sometime in their lives will cross an international border = 10%
  • Global exports as portion of the value of all goods produced in the world = 20%

According to Ghemawat, while the Internet has had an impact on the world's economy, it may well be that domestic economies can be expected to continue to be the main focus in most countries.