Question

In what areas have technological advances had their greatest effect on facilitating world trade and investment?

Answer 1

Most important drivers of market globalization since the 1980s have been technological advances in communication, information, manufacturing, and transportation. While globalization makes internationalization an imperative, technological advances provided the means for internationalization. With the help of this, firms now interact more efficiently with foreign patterns and value-chain members than ever before. Firms transmit all variety of data, information, and vital communications that help ensure the smooth running of their operations worldwide.

Companies use information technology to improve the productivity of their operations, which provide substantial competitive advantages. Technological advances have made the cost of international operations affordable for all types of firms.

The most important activity underlying technological advances is innovation. Societies and organizations innovate in various ways, including new product designs, new production processes, new approaches to marketing, and new ways of organizing or training. Innovation results primarily from research and development.

An advance in technology provides the means for internationalization of firms.

Advances in technology:

Facilitates the development and spread new products and technologies;

Reduces the cost of doing business internationally;

Enables even smaller firms to go international

Helps coordinate worldwide activities;

Mitigates geographic distance by providing virtual interconnectedness with customers, subsidiaries, intermediaries, and suppliers.

Technological advances have had the greatest impact in several key areas:

Information technology.

Communication

Manufacturing, and

Transportation.