Financial Daily from THE HINDU group of publications
Friday, Jun 13, 2003
Making globalisation work
AS THE G8 summit opened in Evian recently, the anti-globalisation movement was once again on hand to protest the G8 and corporate-driven globalisation.
The agenda for an alternative summit, timed to coincide with the G8 meet, covers important ground from debt relief to AIDS to corporate responsibility but once again fails to address a crucial issue of our times: What kinds of technologies are appropriate for different regions, countries and communities around the world?
Today's globalised economy is predicated on the idea that it is advantageous to produce only those things that you can do more cost-effectively than other places in the world, that free trade across the globe would link producers in any part of the world to consumers elsewhere, and that advanced technologies would make all this possible.
Mainstream economists such as Joseph Stiglitz have criticised how the global economy is being run, focussing on the lack of transparency and accountability in institutions such as the International Monetary Fund and the World Trade Organisation.
This is also a primary complaint of anti-globalisation activists. But a fundamental premise of globalisation that global trade and advanced technologies are essential for poor countries has rarely been challenged and, certainly, not been vigorously debated yet.
E. F. Schumacher pointed out three decades ago that the choice of technology is the most critical decision that a developing country must make.
In a truly free global economy, countries and communities might be able to choose technologies that are appropriate for their local conditions. Part of the discomfort of globalisation comes from the fact that large corporations have already made this choice for us and imposed a rather uniform standard the world over for technologies that everyone must use.
The corporations that dominate the global economy are philosophically committed to capital-intensive technologies that can lead to increases in labour productivity the economic output per worker and economies of scale through mass production. This results in centralised, large-scale and highly automated manufacture and farming, which are often in conflict with the realities of many developing countries.
These countries are typically burdened with large populations with a great deal of underemployment if not unemployment and limited natural resources such as land, water, forests, space for dumping waste, and the capacity of natural systems to absorb and cleanse pollution. The large-scale technologies of the global economy rapidly deplete these natural resources by converting them into products and services, without adequately employing and utilising the abundant human resources.
Moreover, the trend toward large-scale manufacture and farming leaves numerous small farmers and manufacturers in developing countries at a major disadvantage. Though globalisation promises developing nations that they can escape poverty by exporting their products to the vast markets of the rich countries, it is difficult for small-scale producers to compete with mass-produced, low-cost products that are flooding the markets in every part of the world.
If the anti-globalisation movement is to make any headway in reforming the global economy, it must convert the widespread discontent with globalisation into a compelling vision that can challenge the status quo. This vision must be clear about the technological choices at its core. Conditions in developing countries suggest that it is more important to maximise resource productivity than labour productivity.
Rather than eliminating manual labour, it would be more logical to adopt smaller-scale technologies that encourage an optimal level of human involvement. These technologies must also be designed to help maximise the efficiency of resource use in agricultural and industrial production, while minimising the need for large amounts of capital.
Small-scale technologies are usually a better fit for small, local businesses serving local populations than for large corporations with far-flung operations. Local businesses, in turn, have the potential to strengthen their communities by employing local people and being sensitive about conserving local resources.
Adoption of smaller-scale technologies would thus signify a fundamental shift in favour of local economies, with less emphasis on global trade for basic necessities.
In place of today's centralised global economy dominated by large corporations, a new kind of decentralised globalisation may be possible. A global information economy could propagate good ideas very quickly around the world.
Expertise in other parts of the world could be tapped for critical problem solving, while allowing local communities to remain in charge of their production and consumption.
Globalisation that works for people in every part of the world must be built on a broad mix of technologies, with countries and communities free to choose technologies that are appropriate for them.
(The author works in Silicon Valley's hi-tech industry and writes frequently about the social and environmental impacts of technology.)
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