Development After Industrialization

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DEVELOPMENT AFTER INDUSTRIALIZATION:POOR COUNTRIES IN AN ELECTRONICALLY

INTEGRATED GLOBAL ECONOMY

CHHOR Serey Bormey

HIM Sreyrathnika MEN SokphirumSREY Sorphea SAN Boromeichan

Professor: Dr. KONG Thay


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Content

I. Definition of globalization

II. Six components of Globalization

III. Development in the post-industrial age


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I. Definition of Globalization

IMF Definition of globalization :

the growing economic interdependence of countries

worldwide through the increasing volume andvariety of cross-border transactions in goods and

services and of international capital flows, and also

through the more rapid and widespread diffusion of

technology.


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II. Six Suggested Components of

Globalization

1. Deeper and wider integration of national economies.

2. Increased autonomy, scale and velocity of international

capital markets.

3. The enormous cost, risk and complexity of technology.

4. The blurring of distinction between manufacturing and

services.

5. The digitalization of the economy.

6. Space-time compression and simultaneous awarenessin global events.


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1. Deeper and wider integration of national

economies.

Trade:

- Intra-firm trade: Trade between

affiliates of companies located in different

countries.

-Intra-industry trade: Trade involves theimport and export of similar goods.

Direct investment, FDI

Capital flow


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2. Increased autonomy, scale and velocity of

international capital markets

Autonomy: freely movement

Bigger scale because of integration and

technology

Faster velocity (speed)


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3. The enormous cost, risk and complexity of

technology

The enormous cost, risk and complexity of

technology in many strategic or leading

sectors

Dramatic increase in the scale of technology its cost,

risk , and complexity in industries such assemiconductors, aerospace, telecommunications, and

pharmaceuticals.

There are 2 important implications of dramatic increase

in the scale of technology


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1. Combination with the growth of electronic

networks

2. The largest national markets are now too small

to allow recovery of R&D expenses in many of

these industries(national markets may no longerbe large enough to serve as viable units of the

world economy)


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The information revolution

Electronic information technology has reduced

the importance of physical proximity.

Facilitates the integration of geographically

dispersed operations.

Markets are moving, albeit slowly, fromgeographic space to cyberspace.

Ex. International Financial Market


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How does IR facilitate in LDCs?

As Primo Baga (1996) notes, it provides another

source of opportunity for LDCs. It allows services

to be provided in developing countries and

consumed in the advanced industrial countries.

The foremost case example , the Indian softwareindustry the article Bangalore Bytes, stated that


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In 1997/98 the turnover of the Indian software

industry reached an estimated at $2.70 billion

versus a mere $10 million a decade ago.

The Software Industry developed originally in

Bangalore, a large Southern Indian city (over 20%of the largest firms are still headquartered there).


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There are a large number of firms, many of them

indigenously owned and managed, developing and

exporting software services to world market

standards.


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4. Blurring of distinction between

manufacturing and services

Factors led to the growth of the industry over in1980s :

1. Standardization and the phenomenal growth of the

PC.

2. Hardware import policy was liberalized in 1984 and

the introduction of PCs into India.

3. Towards the end of the decade, multinational firms

such as Citicorp began to invest in software

development subsidiaries and joint ventures in India.


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5. Economy Digitalization

Shift from trade in

atoms to trade in bits:

i. Information revolution

ii. Emergence of internetiii. Software innovation

Cyberspace market

movement

i. E-finance

ii. E-commerce

iii. E-cash

iv. Outsourcing

v. Insourcing

vi. Supply-Chainingvii. Informing

Geography, borders and

territorial jurisdiction will

be irrelevant.


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6. Space-time Compression

Awareness of global news around the world

Understand the trends and ideas of political leaders.

Economic, cultural, political globalization are all

important to understand.

For example:

- Debt crisis in Greece

-ASEAN Community in 2015

-Rising China and its influence in Asia

-US and China power competition in Asia

- Korean soft power influence- Conflict of interests in joining Kyoto Protocol

between US and China.


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III. Development in the post-industrial age

If a nation becomes post-industrial it passes through

a phase of society predominated by a manufacturing-

based economy and moves on to a structure of society

based on the provision of information, innovation,

finance, and services.

In the emerging post-modern electronically networked

world economy the very idea of territorially is losing

meaning.


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Fragmentation and reintegration through

electronic networks has its advantages:

i. It greatly facilitate integration into the

world economy for individuals and firms in

the developing countries.

ii. It allows for the development of industries

that one could not have imagined in India or

Malaysia.


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iii. It provides opportunities for LDCs such asallowing services to be provided in developing

countries and consumed in the advanced

industrial countries.

iv. The information revolution puts a premiumon education and access to computers and

communication networks.


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However, there are COSTs: Greater openness has made small

parts of the developing world full

fledged members of the global village. There is an increase of polarization of

wealth and income among developing

countries.


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Development After Industrialization

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