pippala leaf

March 13, 2005

Globalization: Technological superiority

Filed under: Uncategorized — MBN @ 6:42 pm

As more and more Western corporations shifting their manufacturing and R&D’s to Asian countries, will the West lose its edge on technological superiority? Not in near future, but eventually it may, as soon as the innovation starts residing in the suppliers. For the time being those “left brain” routine intellectual tasks would outsource to the East and “right brain” creative tasks would remain with the West, mainly US. There are two main reasons for this: One is proximity to the consumers. According to Azim Premji, Chairman of Wipro, “to be a successful product company requires intimacy with the customer. That is very hard to offshore in fast-changing markets”. As the customer market increase in the Asian countries this trend may reverse. One small example is Japan. Many of the latest electronic gadgets available in the Japanese market are not yet available in Europe or North America. Second reason is the intellectual property ownership, which is directly proportional to a company’s value. Investor’s may not willing to put all their stake in a company which pay much of their profit as licensing fees. But the eventual Asian domestic market growth, subsequent fierce market competition along with technological advancement of Asian companies may force the western companies to further downsize their spending on R&D.

But again the world goes hardly the way I think….


1 Comment »

  1. I wonder… i am not a fan or social theory, but i had to take a class in power and politics where this view on globalization was brought up.

    Globalization is just a new form of colonialism, slavery or any other form of opression. I recently chanced to watch a movie called the yes men; the fellows (for the lack of a better word) explain that if the western world had not abolished slavery, it would have evolved into globalization.

    If slavery still existed, you would have to ship slaves from the third world, provide basic clothing and shelter and medical benefits (which is expensive in the west). For the economic entity engaged in this activity it is much cheaper to let the slave remain a slave in his own home country. Technology enables you to do this. This is globalization.

    i don’t know if i am too cynical if this view appeals to me!

    Comment by vikram — April 13, 2005 @ 5:20 am

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