Technology and World Commerce

Technology and World Commerce

GEO 150

Vince Johnson

June 20, 2005

Technology and World Commerce

Technology has changed global commerce. The question is to what extent has it changed commerce, and how has it changed commerce. What are the repercussions of global commerce and commercial patterns on the natural environment? This paper will strive to answer some of these questions, as well as, delve into other areas of global commerce.

When referring to global commerce, the word globalization is often used. The word globalization is used to "describe the changes in societies and the world economy that are the result of dramatically increased trade and cultural exchange" (Wikipedia, 2005). In economic contexts, it refers almost exclusively to the effects of trade and particularly to "free trade". Since the travels of Marco Polo seven centuries ago, global economic integration, through trade, factor movements, and communication of economically useful knowledge and technology, has been on a generally rising trend (Mussa, 2000). During the past half century, the pace of economic globalization has been particularly rapid. This includes the reversal of the interwar decline. Globalization is not new, it has only changed.

One of the fundamental factors that has affected the process of economic globalization is the improvements in the technology of transportation and communications. This has reduced the costs of transporting goods, services, and factors of production and of communicating economically useful knowledge and technology. There is no doubt that advances in information and communications technology are the most important technological advances of the past quarter century (Mussa, 2000). By far, the most important and business altering advancement is the internet. There is evidence everywhere that the internet has greatly affected international trade. The internet has opened up the world, and brought it right into everyone's home and business. In addition, technology and the internet have greatly reduced the costs of doing business. Even the smallest operation can now go global via the internet at almost no cost. However, there are still some problems that face these e-commerce activities. These problems are shot-term challenges and can be met. The key issues center around two areas:

Global Data Standards and Data Synchronization

Trading Exchanges

"The long-term challenge is to accelerate the development of next-generation technologies in a way that avoids repeating the mistakes of the past" (Global Technology Initiative, 2003). Even with these challenges, e-commerce is changing the face of business worldwide every day. In mid 1999, General Motors announced a development, which simultaneously accelerated the process of globalization and e-business (Reynolds, 2000). GM merged all its e-commerce and electronic trading activities into one coherent and logical entity: E-GM (Reynolds, 2000). The function of E-GM is to provide a focal point for all the e-business activities of General Motors. This is a major step for GM that will streamline it much faceted business, which will mean greater profits in the end.

In 1997, reliable sources forecast that by the year 2002 around 5% of all transaction worldwide would be conducted by e-commerce. However, in 2000 the percentage of worldwide transactions conducted by e-commerce was already up to 7%. The scope of e-business and the accelerating speed of its influence is astonishing. The language barrier was, at the beginning, a challenge for thousands of businesses. This barrier proved to be of little consequence. One reason is that software companies are creating programs to knock down this barrier. For example, in 2001 eGain Communications Corporation introduced a new and unique email management product called eGain Mail Global. This new software provides support for inbound and outbound emails in virtually any language and agent consoles that have been localized into eight of the world's languages (Carr, 2001). Carr also states that according to the Consumer Industry Almanac's February 2001 forecast, 67% of all internet users reside outside North America. The internet continues to diversify, develop, and evolve as a medium for global commerce. In its broadest sense, the internet has become a key medium to support the flow of commerce through the use of telecommunications and information processing technology (The Economist, 2000). Internet commerce empowers businesses and consumers by extending their reach and broadening their access to information. One can now shop virtually all over the world, twenty-four hours a day from one's computer. Through the technology of the internet and e-commerce, the world has shrunk.

"Three fundamental technical changes in information communication technologies (ICT) are responsible for the explosion in their use to promote economic development. These changes are plummeting costs, expanding access to the network, and more powerful human-to-machine interfaces (Gage, 2000, p. 4). These changes will continue and accelerate. The results will be that ICTs will permeate even the poorest regions of the world over the next several years. By the end of 2005, more than two billion human beings will be linked by networked systems of mobile communications devices. These humans will talk, they will exchange messages; however, something else will occur. The devices themselves will alter their own behavior by exchanging code with other devices on the network - machine-to-machine talking (Gage, 2000, p. 5). This is a new foundation for systematic change, and the potential market for this innovation is growing exponentially. In the next five years, machine-to-machine communications will surpass human-to-human communications (Gage, 2000, p. 5).

Globalization and internet technology are changing the cultural landscape in some fundamental ways. For example, in Europe, native languages are giving way to English, up to now, the language of globalization. It is also increasing the disparity between the "haves" and the "have nots", and forcing a great human migration from east to west and from north to south. This is resulting in a clash of cultures as people wrestle with how to preserve their cultural identities in an increasingly borderless commercial world (Rifkin, 2001). There is a rising tide of those who would step forward and put a halt to the rapid rise in globalization and technology, or at the very least slow it down. These new cultural activists argue that people cannot create commercial