Access to global markets allows new technologies to spread more rapidly. This allows for increased innovation, faster technological developments, and reduced research and development costs.
If Ericsson, the Swedish telecom company, had not enjoyed access to global markets (leaving only Swedes to buy their products), its technology would have taken much longer to reach international markets. As a result, the development of 3G and 4G networks, which featured GSM technology that built on the mobile technology in Ericsson’s products, may have taken far longer. When the telephone was invented, it took 75 years to reach one million users. The radio needed 38 years to reach the same number of users. By contrast, the internet developed 50 million users in just four years. This increased access to new technology allows for more innovation, faster rates of development, increased productivity, and reduced inequality between developed and developing nations. In the Indian state of Kerala, for example, the increased availability of mobile phones allowed fishermen from different towns to coordinate their pricing strategies, increasing profits by an average of 8%.
The transfer of technology only takes place in the form of consumable products. This means the economic benefits of technology transfers to developing nations are largely absent. The traditional model of technological development and industrialization dictated that technology became available once the domestic industrial sectors had developed the know-how, manufacturing capabilities, and a thriving domestic market. Once all three of these were established, the industrial sector would develop the technology and reap the economic rewards that came with it in the form of increased output and higher economic growth. Globalization has handed developing countries the technology without any of the economic advantages that come with it. Because the developing nation hasn’t developed it themselves through the establishment of improved manufacturing capabilities and a domestic demand for the technological product, it has no way of leveraging the technology to generate economic growth and development. Technological acquisition in this manner is also highly unequal. In developing nations, only the wealthy, urban populations can generally afford to purchase the new technologies, excluding vast swathes of the rural population from its benefits and fueling inequality.
[P1] Globalization allows new technology to spread more rapidly. [P2] This increases innovation and expedites technological developments.
Rejecting the premises
[Rejecting P2] It also increases inequality and provides minimal economic benefit.