BMA534 International Business : About Globalisation and Technology

Introduction

Globalisation is the process through which different economies integrate and operates. This terms includes Political, cultural and economic trends of different economies to carry on business and trade with each other (Irani & Noruzi, 2011). In this report, globalisation will be discussed in terms of technology and automation of machinery which is resulting in the loss of the jobs of lower class of workers.  In United States of America about 85% of the jobs which are lost are due to largely automation and technological change. It is because the companies have to spend lesser cost on technology rather than making payments to the workers (Cocco, 2016). The technology and up gradation of machineries is done because of the emergence of globalisation. The countries can use technologies of different countries to suit their business and it is clear that Globalisation is responsible for the job losses.  Even better skills are not able to save the lower class jobs. This report will discuss that how globalisation, technology and automation are affecting the millions of jobs in various parts of the world.

What is Globalisation?

Globalisation is the process of the integration of various nations which influence each other and share their ideas, technology, people and culture to expand the areas of business and trade. Globalisation has aided many countries to flourish and also created complications for many. But, the supporters of the globalisations make an argument that globalisation has made this world a better place to live and reduce the problems and issues like unemployment and poverty (Michie, 2011).

Globalisation and Technology

Globalisation has led to the emergence of technology because of the infusion of technology and foreign capital. It provides a chance to the underdeveloped or developing economies to develop and prosper. The technology shared with these economies helps them in prosper. The countries like China is flourishing and competing with big super powers on the basis of technology (Collins, 2015). At present, in every corner of the world, the lives of people are changing because of technology. It has improved the ability of businesses to communicate and process information which are shaping economies and developing societies across the world (O’ Dwyer, 2016).

Globalisation has witnessed billions of poor people coming out from the poverty as it has transformed the lives of people. It has provided new businesses and jobs to people. But on the contrary, the range of jobs obsoleted because of technology. The machineries have been automated which are resulting in the loss of jobs of the employees leaving them unemployed. One of the best examples can be taken of the bar code scanners in supermarkets. The bar code scanners have been automated which resulted in the sudden obsolescence of the number of jobs. Also, the Automatic Teller machines (ATM’s) in bank have reduced the required of human capital in the banks (Ørberg Jensen and Pedersen, 2010).

The recent political developments have threatened the globalisation and send it to reverse which could have major implications on the long term growth and investment in the markets of the countries. When globalisation was in its early years, it was considered as irreversible. The politicians of that time saw it as a wave which would bring long term success for the countries. Globalisation has been reshaped now. The vote of Brexit and the election of Donald Trump as president of United States of America show the anti-globalisation sentiments in many countries like China and Russia. This shows that Globalisation is going in reverse. Globalisation till now has shown tremendous growth in technology, regulations, communication and more. The changes and up gradation in technology is the industrial revolution which is a driver of economic change but it has resulted in the displacement of jobs (Hafner and Owens, 2008).

Technology and impact on the lower class jobs

 Developments in the technology due to globalisation have changed the industrial landscape in many countries. It has increased the productivity of the labour because of the application of digital technologies and it has also increase the productivity of the companies as the activities have now been automated in most of the companies. The technologies have also resulted in the development of new industries and new jobs like website development, internet providers, etc. but have also shrunk the jobs because the automation has taken over the jobs of people in the companies. The companies prefer to automate their activities in order to cut down their costs and to increase the effectiveness in the work (Ford, 2009).

Technological changes have taken place due to the concept of globalisation. Technological advancements are taking place in the global market and these technological advancements are being adopted by the companies for enhancing their performance and gaining a competitive advantage. Technologies are being imported by the domestic companies from the global market for boasting their sales. This has resulted into a war between the workers and technological changes. Globalisation has increased the changes of automated future which is affecting the jobs of low class employees adversely (Brown, et al., 2008). Technological changes and automation has fastened the output by outperforming humans. Skills and training is required for the purpose of coping with the changing technologies adopted by the companies. It has been estimated that by 2021, four out of ten people will lose their jobs due to the concept of globalisation which has increased the use of advanced technology. According to Darrow (2017), the number of people losing their jobs due to technology changes and automation will increase with the change in time. This increase in the trend has been identified since the industrial revolution. In the words of Clark (2017), use of technology has resulted into rise in the use of robots at the place of employees which has created negative impact on the jobs of lower class employees.

Use of advanced technology and automation has resulted in enhancement in the performance of the companies but adversely affected the lower class employees. Implementation of advanced technology and automation can be handled with proper training and require skills. Lack of these skills and proper training results in losing the jobs by the lower class employees. There is a need to deal with this issue so as to overcome the issue affecting lower class employees and costing them their jobs. Technology and automation has changed the manner in which companies operates. The corporates need to handle the market driven forces and speed up the production by using the high end technology. But this has created a rage in the employees as their jobs are losing (Borenstein, 2011).

Information technology is restructuring the business practices across the globe. Earlier, Globalisation has started the trend of shifting the employees from cheap markets like India and China to the markets of developed countries. This helped in providing the businesses with the cheap labour and also helped employees in getting the higher payments. But the trend of reverse outsourcing has been started and now technology is affecting the jobs of lower class people in countries like USA< Australia and UK. The automation in technology is resulting in the loss of jobs of lower class of labour which is leaving them unemployed and increased poverty among them. There are dramatic changes seen in the workforce and labour industry cause of globalisation. The change in technologies now required the workers experts in software management, digital expertise and in information system (Kromann, Skaksen and Sørensen, 2011).

On the contrary, the demand for those workers decreased where computers and digital devices have replaced the work of the labour. That is why, workers have lost their jobs and globalisation is responsible for it. Automation I machineries lead to the reduction in jobs. For e.g. in the steel industry 75% of the workforce was lost during the years 1962 and 2005 but still the productivity never seen any decline. It was because a new technology called minimal is used and it resulted in better practices, management and control. It also resulted in Job losses and unionisation of rates of steel products. The other industry which faced similar situation was apparel industry. Technology advances therefore has reduced the jobs of poor people (Miller, 2016).

As per Miller (2016), automation of machinery had a happy ending. It is because if it displaced jobs, it has created some new jobs but the nature of jobs is different. The lower class of workers do not have skills to apply for the new jobs created. For them, it is complicated to perform the new jobs. For example, a worker who works on tools and parts or carry them from one place to another cannot be comfortable with the computer job. The labour economists say that there are some solutions which can get the jobs for the workers who lost their jobs because of automation. But for this, they need training programs, support from unions, more jobs in public sector and higher wages for the workers. If people can get access to better education since childhood and training on job, they will be efficient enough for new jobs created. It is found that technology is capable of doing 45% of the work for which people are paid to do (Kromann, Skaksen and Sørensen, 2011).

As technology is advancing, automation has affected many jobs in many parts of the world. It is believed that education is the key to have higher employment in the nation and higher wages but with the advent of globalisation and technology up gradation, the employment rates have been decreased even if education is increasing. It is believed that if the labour has to make shared benefits of the technological changes, they need strong social protection and strengthening of labour laws. According to Michell (2015), the advancements made in the technology have brought significant changes in the jobs and the working conditions of people. The production and manufacturing activities have been shifted to the nations with lower wage labour. In the developed countries, the automation has led to the increase in the loss of jobs of low income wage earners. The traditional lower class jobs are disappearing because of the increase in the automation of machinery. There is a demand for skilled labour but the skills mismatch which can be matched with the help of training. The government of different countries should pay attention to better access to education to the workers and training to make them skilled or upgrade their skills so that these workers can have jobs in their hand and can earn for their living. The workers can shift to higher level of jobs once they get training and education. This will also bring an increase in their skills and knowledge with the increase in their payments and salaries (Chang & Huynh, 2016).

Automation of machineries have significant widened the range of tasks done by the computers and machines therefore creating competition between labour and machines. An example can be taken of Transport Industry. The trains, cars or other vehicles are made now made which no longer need a driver to run. Google cars are one such example which navigate and is driven without any supervision of human. On the other hand, the companies like Uber which are using the taxi drivers will face competition from the driverless cars. The robots are taking over humans for the tasks lie cleaning, serving or catering at various places like hospitals or restaurants. Computers are more capable as they can detect frauds and diagnose the problems. They are fast and efficient which is creating more need of machines than human labour. Mckinsey made an estimate that automation is providing threaten to the 140 million labours across the world. Also, a research was done at Oxford University which predict that because of automation around 47% of the jobs in USA and one third of the jobs in UK will face threat (Hicks & Devaraj, 2015).

Technology has created a pressure on the availability of work because of which the workers are not able to get their full time jobs and payment leading to worse state of poverty. Technology has brought economic growth but diminished the need for lower level of labour. The loss of labour has been on continuous trend of declining since globalisation came into the process. It can be explained with an example. AT&T, one of the most valuable companies employed 758611 people and was worth $267 in the year 1964 while Google which is one of the most valuable companies of today employs only 55 thousand people and is worth $370 million. It shows that automation has decreased the workforce in the companies to a huge level. Technological changes have eliminated the jobs for which most of the lower level of workers is best suited (Ignatius, 2016).

As per West (2015), Robots and artificial intelligence are no doubt transforming human lives but these are affecting the employment. These have made significant impact on the workforce especially on the lower class jobs and on the incomes of lower class workers. As per the projections made by The U.S. Bureau of Labor Statistics (BLS), 15.6 million new positions will be created between the years 2012 and 2022 which is equal to the 0.5% of growth in the labour force. It anticipates that around 65000 jobs will be lost in the coming decade and the workers will be jobless thereby creating unemployment. Digitisation has decreased the demand for routine and manual tasks which is resulting in the loss of jobs of people. Therefore, automation of machinery is a risk for lower class of workers. The number of jobs created is not matching the number of jobs displaced because of automation. Job security is one of the biggest issues in the present economies. It is not because of competition from foreign countries but because of advanced technology. It is the biggest problem for the companies that the salaries paid to the workers like Drivers, clerks and other will disappear in the future because this work will be taken over by the robots and machines or systems. This clears that new technology with the advent of globalisation eaten up the jobs of lower class workers (Ignatius, 2016).

Conclusion

It can be concluded that technological changes have taken place due to the concept of globalisation. Technological advancements are taking place in the global market and these technological advancements are being adopted by the companies for enhancing their performance and gaining a competitive advantage. Technologies are being imported by the domestic companies from the global market for boasting their sales. This has resulted into a war between the workers and technological changes. Globalisation has increased the changes of automated future which is affecting the jobs of low class employees adversely. Technological changes and automation has fastened the output by outperforming humans. Skills and training is required for the purpose of coping with the changing technologies adopted by the companies. It is concluded that the politicians should think boldly to fight this critical issue. The employees should be trained and made skilled in order to make them competitive for the jobs created. These jobs need skills and efficient labour which can only be made available by providing good training and education to the unskilled workers. This will help in reducing the unemployment in the country.

References

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