The Global Undercurrent

Globalization; a continuous process not a destination, has had a lasting effect on the economies throughout the world. For some it meant prosperity and for others it created issues of national importance. But like any other word, this too is open to several interpretations, and the developed world draws satisfaction by limiting the meaning of 'globalization' to movement of kapital, but not Labor; the two essential resource components of any economy. But what they probably lack, is prudence. Considering that remunerations to labor are essentially governed by the standard of living in any economy, a similar task carried out in two different economies will carry different costs. Now when technology makes it possible for the owners of business to transfer jobs beyond the geographical limitations of a country, the jobs would most certainly fly out to those countries where the costs are low. The gradient of development favors the developing economies. The income earned by the way of off-shored jobs increases the consumption levels in the developing economies, as the marginal propensity to consume is high in such countries with minimal living standards. Such a participation of emerging economies in global trade also helps in stabilizing it. This implies that off-shoring jobs gives clear benefits to the servicing country. Now considering the physical movement of manpower, it is clear that there are obvious advantages for both the developing nations and the importing country. This is because when they earn, they still spend a part of their incomes on living, which goes back into the same economy. Moreover, the savings of this labor are also circulated in the economy, and essentially the cost of employing this labor turns out to be the going rate of interest of the economy, which in case of a developed economy is very low. All this leads to two distinct sets of benefits and drawbacks. But surmising the changes in Information and Communication technology, the above arguments appear trivial. This is because; we human beings have defined physical boundaries within which the business was supposed to be carried out. Now with signs of these demarcations diminishing and a whole new world without boundaries; the World Wide Web, getting created, the old rules of business no longer apply. The development of Information and communication technology will enable businesses to meet and discuss issues online without having to meet in person. Technologies like online video-conferencing and next generation IT tools for businesses will have a strong impact on location of offices and travel. Such facilities; being made available at ever reducing prices, warrant against building offices in key business centers where the price of property is atrocious Yes it is true that even today the owners of these concerns shall continue to look for ways to reduce costs, some radically while others in a piecemeal manner. At the end, when it is cost-effective to transport information than to transport human beings then why not offshore. With such convincing reasons favoring off shoring jobs to developing nations, physical movement of manpower lacks lustre. But this is the view shared by the beneficiaries of off shoring. From a developed nation's perspective, it is a complete antithesis, and they would always recommend bring in people than exporting jobs. Therefore, having evaluated the two options and taking into consideration that majority of these developed nations are capitalist societies, that off-shoring may soon take an upper hand over short term welfare of the economy.