Opportunities in globalization
Published in the Philadelphia Inquirer June 4, 2006.
Smart innovation is key to long-term prosperity. Nations won't thrive by just accepting low pay.
Rocco Leonard Martino
is chairman and CEO of CyberFone Technologies; early in his career, Martino worked with the inventors of ENIAC, which celebrated its 60th anniversary in 2006
The seed of globalization germinated 60 years ago at the University of Pennsylvania, where ENIAC, the first operational general-purpose electronic digital computer, was unveiled in 1946. That single 11-ton machine has spawned more than 200 million computers worldwide, a number growing at 20 percent per year. Its stepchild, the cell phone, has grown to more than 1 billion units in one-quarter the time, and that number will at least double in the next 10 years. We can now connect with anyone, anywhere, at any time. This on-demand world fulfills the vision of a "global village" Marshall McLuhan put forward in 1964.
My argument here is that we need not fear globalization if we are ready to serve this rapidly growing world of on-demand markets. Such markets will be created and energized by Web-based labor, and our political and business leaders need to do all they can to encourage and reward it in the United States.
Web-based labor can encourage the rebirth of the American cottage industry as a potent economic contributor. It will help individuals and companies to conceive, make, sell and ship goods in low-capital-requirement environments via the Internet.
Globalization has accelerated dramatically over the last decade, leading to wealth redistribution and to dislocations here and abroad. Many Americans are concerned that the newly flat playing field may put us at a disadvantage in global commerce and trade. Nations whose workers will work for the lowest bidder seem to have an advantage, and larger, high-labor-cost nations such as the United States seem to lose out.
Thus there are efforts in the West to stem globalization. In France, measures are being taken to prevent foreign acquisition of majority interest in a number of companies. Protectionist rules in agriculture have long applied in Europe, despite EU treaties seeking a level playing field.
But long-term benefits can counter globalization's short-range dislocations. Politicians too often blur the distinction between the two in seeking votes. To be sure, globalization seems to favor low-cost-labor nations. But the ultimate goal is sustainable, growing national wealth, not dominance as a lowest-cost manufacturer. Hence, the American economy need not suffer if it can continue to exercise profit control through innovation and invention.
Of the world's 6.5 billion people, it is estimated that more than 1 billion use the Web. The power this gives people is the catalyst behind the "miracle" of Ireland; the burgeoning economies of China, Japan, and Singapore; and the software revolution and wealth creation in India and other nations. It permits us to buy a PC for less than $500, with the $100 PC on the way. Many complete service components, such as customer service, are now global.
The United States is well-positioned to compete in this new world. The A.T. Kearney global management consulting firm has developed a globalization index that measures countries' "economic, person-to-person, political, and technological integration." In its 2005 report, Singapore rose to first place, overtaking Ireland, which had led for the previous three years. The United States rose to fourth place largely on the growth in its Internet hosts and secure servers.
And in fact high labor-cost, well-educated nations can compete with the low labor-cost countries, if they stay one step ahead. Progress lies with new skills, better management, new products, and above all, new industries. Globalization is creating forces that will demand new products and services geared to on-demand response.
Politically, our leaders can implement tax incentives for development and job creation in these new industries. In the workplace, the most far-reaching development will be telecommuting. The American workforce now lives in an information society - but it is stuck in an industrial workplace model. Energy consumption could be dramatically reduced with more telecommuting. The United States uses more than 20 million barrels of oil a day, two-thirds of it in transportation. Sixty percent of it is imported. Consider the effect of reducing that by 20 percent, a target well within reach with telecommuting. The result would be to reduce pollution, travel time, auto accidents, and the overhead of conducting business, all while improving productivity and employee job satisfaction. The balance of payments would be reduced by more than $100 billion a year, and GDP would increase. If we can outsource service work to Bangalore, India, then why can't we find a way to make outsourcing to American workers in Bangor, Maine, or Bowling Green, Ind., viable?
The "miracle" of Ireland can be our miracle - indeed, it can be every nation's. We simply need to engage in what has already happened with spirit and passion to succeed.
Contact Rocco Leonard Martino at rlmartino@gmail.com.
Smart innovation is key to long-term prosperity. Nations won't thrive by just accepting low pay.
Rocco Leonard Martino
is chairman and CEO of CyberFone Technologies; early in his career, Martino worked with the inventors of ENIAC, which celebrated its 60th anniversary in 2006
The seed of globalization germinated 60 years ago at the University of Pennsylvania, where ENIAC, the first operational general-purpose electronic digital computer, was unveiled in 1946. That single 11-ton machine has spawned more than 200 million computers worldwide, a number growing at 20 percent per year. Its stepchild, the cell phone, has grown to more than 1 billion units in one-quarter the time, and that number will at least double in the next 10 years. We can now connect with anyone, anywhere, at any time. This on-demand world fulfills the vision of a "global village" Marshall McLuhan put forward in 1964.
My argument here is that we need not fear globalization if we are ready to serve this rapidly growing world of on-demand markets. Such markets will be created and energized by Web-based labor, and our political and business leaders need to do all they can to encourage and reward it in the United States.
Web-based labor can encourage the rebirth of the American cottage industry as a potent economic contributor. It will help individuals and companies to conceive, make, sell and ship goods in low-capital-requirement environments via the Internet.
Globalization has accelerated dramatically over the last decade, leading to wealth redistribution and to dislocations here and abroad. Many Americans are concerned that the newly flat playing field may put us at a disadvantage in global commerce and trade. Nations whose workers will work for the lowest bidder seem to have an advantage, and larger, high-labor-cost nations such as the United States seem to lose out.
Thus there are efforts in the West to stem globalization. In France, measures are being taken to prevent foreign acquisition of majority interest in a number of companies. Protectionist rules in agriculture have long applied in Europe, despite EU treaties seeking a level playing field.
But long-term benefits can counter globalization's short-range dislocations. Politicians too often blur the distinction between the two in seeking votes. To be sure, globalization seems to favor low-cost-labor nations. But the ultimate goal is sustainable, growing national wealth, not dominance as a lowest-cost manufacturer. Hence, the American economy need not suffer if it can continue to exercise profit control through innovation and invention.
Of the world's 6.5 billion people, it is estimated that more than 1 billion use the Web. The power this gives people is the catalyst behind the "miracle" of Ireland; the burgeoning economies of China, Japan, and Singapore; and the software revolution and wealth creation in India and other nations. It permits us to buy a PC for less than $500, with the $100 PC on the way. Many complete service components, such as customer service, are now global.
The United States is well-positioned to compete in this new world. The A.T. Kearney global management consulting firm has developed a globalization index that measures countries' "economic, person-to-person, political, and technological integration." In its 2005 report, Singapore rose to first place, overtaking Ireland, which had led for the previous three years. The United States rose to fourth place largely on the growth in its Internet hosts and secure servers.
And in fact high labor-cost, well-educated nations can compete with the low labor-cost countries, if they stay one step ahead. Progress lies with new skills, better management, new products, and above all, new industries. Globalization is creating forces that will demand new products and services geared to on-demand response.
Politically, our leaders can implement tax incentives for development and job creation in these new industries. In the workplace, the most far-reaching development will be telecommuting. The American workforce now lives in an information society - but it is stuck in an industrial workplace model. Energy consumption could be dramatically reduced with more telecommuting. The United States uses more than 20 million barrels of oil a day, two-thirds of it in transportation. Sixty percent of it is imported. Consider the effect of reducing that by 20 percent, a target well within reach with telecommuting. The result would be to reduce pollution, travel time, auto accidents, and the overhead of conducting business, all while improving productivity and employee job satisfaction. The balance of payments would be reduced by more than $100 billion a year, and GDP would increase. If we can outsource service work to Bangalore, India, then why can't we find a way to make outsourcing to American workers in Bangor, Maine, or Bowling Green, Ind., viable?
The "miracle" of Ireland can be our miracle - indeed, it can be every nation's. We simply need to engage in what has already happened with spirit and passion to succeed.
Contact Rocco Leonard Martino at rlmartino@gmail.com.
posted by John @ 8:46 AM
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