Question

How is information technology connected with globalisation?

Answer 1

Information technology (IT) is the major engine driving the globalisation process. It provides the necessary digital infrastructure to immediately connect economies, businesses, and people across international borders.

1. Rapid Exchange of Information
   • Real-Time Communication: The internet, emails, video conferencing, and satellite links enable firms from several countries to communicate and collaborate instantly.
   • Global Decision Making: Multinational businesses (MNCs) can communicate instructions, designs, and data to manufacturing facilities hundreds of kilometres distant with no physical delay.
2. Growth of the Service Sector (Outsourcing)
   • Cross-Border Services: IT has enabled service-based jobs to be decoupled from geographic locations.
   • Business Process Outsourcing (BPO): Services such as software development, data entry, technical support, and call centres can be easily outsourced from wealthy countries (such as the United States or the United Kingdom) to developing countries (such as India), where trained labour is more cost-effective.
3. Integration of Global Financial Markets
   • Instant Electronic Payments: E-banking, electronic fund transfers (EFT), and digital payment gateways are used to securely and instantly move billions of dollars across international borders.
   • Global Trade Facilitation: IT facilitates the payment process for foreign buyers and sellers, making global trade smooth and frictionless.
4. Efficient Supply Chain Management
   • Tracking and Logistics: Global companies employ advanced software, GPS, and internet networks to track raw materials, manage inventory, and monitor shipping containers in real time across seas and continents.
   • E-Commerce: Online markets enable even small manufacturers to expose their products to a worldwide audience, removing geographical barriers.