Tech notes
Feb 2 2006 By Herb Kim, The Journal
This week I thought it would be relevant to talk about globalisation and, in particular, a book by New York Times columnist, Thomas L Friedman - the best-known chronicler of globalisation.
His latest work The World is Flat is, in my opinion, the best book so far on the topic.
What makes it so striking is that it doesn't attempt to predict how globalisation might change the world in the future. Instead, it gives evidence on how the world has already changed and projects how things will develop in the next decade.
His central thesis is that, around the year 2000, there was an unplanned collision between computer software and global fibre-optic networks that resulted in roughly 1.5 billion extra people entering the industrialised global economy. In short, digital technologies removed `traditional' barriers to international trade and commerce: in the author's words, they "flattened the world".
Last year, 70% of goods sold through Wal-Mart were produced in China; 400,000 US tax returns were completed by Indian accountants and even medical CAT scans were out-sourced to cheaper Australian technicians. We help developing nations like China and India by outsourcing `low-end' jobs. At the same time, we're holding inflation down and getting more goods and services for less money. So why are some folk worried about it?
Well, India and China won't stop at taking our low-end, low-cost jobs, and why should they? They want to invent the technology and build the brands themselves. Ultimately, they want to compete with British and American companies and take a large slice of the markets we currently dominate.
To remain competitive will be a huge challenge for the West. Even George Bush recognised the situation in this week's State of the Union address, as he pledged 70,000 more science teachers and 30,000 professional mathematicians and scientists to be drafted into classrooms to help pupils prepare for the anticipated economic struggle.
The fact some North-East businesses have been quick to take advantage of the globalised economy is good news for the region's economy as, with the aid of digital technology, they're branching into bigger markets. But there's still much to do.
Friedman warns maths and science education standards are slipping in the US, so it could lose out big time to emerging economic superpowers in future. He writes: "In China today, Bill Gates is Britney Spears. In America today, Britney Spears is Britney Spears - and that is our problem."
In the North-East, I don't believe we're at such a stage, but Friedman's warnings should be noted.
Herb Kim is chief executive of Codeworks, North- East centre of excellence in digital technology.
