INFORMATION TECHNOLOGY IN INTERNATIONAL TRADE

Information Technology in International Trade

Information Technology in International Trade

Introduction

The latest stage of this IT boom involved the emergence of such names as AOL, Yahoo, Amazon, eBay, and the multitude of dot.coms that provided the cornerstone to the quickly emerging e-commerce spectrum. Keep in mind, however, that this latest dot.com sector was the hardest hit during the tech decline since March of 2000.

It is a fact that all computing is based on the underpinnings of semiconductor integrated circuits and that high-tech equipment takes its value from software, which must work within the power constraints of the hardware at hand.

Discussion

Not only is state-of-the-art information technology promoting increased commerce for the major industrialized nations but according to projections made by Lucent Technologies in the late 1990s, extensive investments in telecommunications infrastructure by lesser-developed nations are currently underway to level the playing field for global commerce (Kudyba, 2008, 152). For example, the People's Republic of China has been expanding their number of telephone lines dramatically.

This is also the case with such nations as India, Indonesia, and Turkey where telephone density was projected to increase annually at double-digit rates since the mid-1990s. The result of this would be increased traffic on the Internet.

With this greater processing power comes enhanced software applications that store, retrieve, and analyze data that helps companies better understand customers (Kudyba, 2008, 153). It enables them to communicate, facilitate faster time to market of their products, and generally offer competitive advantages for early adopters. On so goes the information age.

Along with this massive trend in innovation has been a corresponding economic repercussion. The leading edge is in the information revolution, which permeates every sector of the economy. In the late 1990s, for example, high tech has taken half a percentage point off inflation and added almost a full point to growth (Kudyba, 2008, 154).” One must keep in mind that the article does not take into consideration the potential increase in demand for labor resulting from the emergence of the new sector of the economy which takes its roots in information technology. The labor effect is yet another point to consider when analyzing the economic repercussions of information technology (Kudyba, 2008, 155). These assertions (e.g., inflation) most likely refer to the fact that firms are operating more efficiently, which infers that they are producing more goods with the same amount of inputs or the same amount of goods with less inputs. There also may be the presence of increased competition, which would result in lower prices as firms continually adopt state-of-the-art technology to gain a competitive edge (Kudyba, 2008, 156). The economic change brought about by the information age has brought attention from some prominent economists as well.

In fact, the increased capabilities of information technology have helped promote the recent increase in globalization. Information systems enhance the facilitation of international communication and transactions. This, along with freer trade policies (augmented by such organizations as the OECD, the World Trade Organization, and Bretton Woods institutions) ...