With globalization domestic labour in the developed world increasingly finds itself competing with labour from low-wage areas of the world. Often low-wage areas are low in other areas as well: they often have little or no environmental protection, few health-care or pension benefits, often don’t have or ignore child labour laws, etc. Low-wage areas are often kept low because labour is not allowed to organize to collectively bargain for better wages and benefits.
With globalization the developed world finds itself in a peculiar dilemma. With powerful global networks of communications and distribution it finds itself competing with the formerly separate markets of Asia and Latin America. Jobs in the auto factories, steel mills–jobs in factories from all sectors of the economy have moved offshore. Firms using information technologies can issue orders, manage inventories, buy resources, design products, or do research just about anywhere in the world. Firms can bring together all factors of production to produce goods and services anywhere on earth: global information and communication technologies mean that corporations can have a virtual presence anywhere. With global brand names the final product is produced anywhere; the final product is sold anywhere.
Global networks mean that work can be done elsewhere and imported into Canada by satellite or ground links. New computer-related jobs have emerged in the Barbados, Philippines and Ireland. Software is written overseas where skills can often be obtained at one-fifth to one-third of the cost in North America. For example, Bangalore in India is emerging as a centre of software expertise. There is a growing global competition for the ‘good jobs’ that are to be found in the ‘new economy.’
Information technology is distance and time insensitive. Globalization implies the increasing porosity of national boundaries. The notion of a Canadian workforce doing 9 to 5 activities in a jurisdiction called Canada is rapidly eroding. We have gone through the competition with low wage countries in textiles, electronics and other manufactured products. Now a sophisticated information infrastructure promises to make service workers halfway around the world competitive with Canadians. Software, telephone order takers, data entry, online data bases, etc. can be located wherever the skills exist at the lowest cost. What are the long term implications for Canada? For the mix of skills needed? Maintaining a high standard of living means providing high value added jobs in Canada: how will this be accomplished in the context of globalization?
Going global is the phenomenon where activities going on somewhere in the world are relevant for someone somewhere else: the interested parties include multinational firms, banks, and governments and citizens. Everybody and everything is connected in a delicate interconnected networked globe. Ultimately all citizens of the world become linked in a complex web held together by communications networks. Response is, more and more, needed and expected in real time. We are moving to a 24 hour work day.
Questions of time management and personal stress arise as the work day blurs. Stock market closings in New York are followed by closings in Vancouver, Tokyo, Hong Kong, London, and New York again. The race may go not to the nimble but to those who can operate with very little sleep or who can manage their time, and stress levels, most effectively.
The global market place is creating a 24 hour day. The stress associated with the phenomenon goes beyond the banks, stock markets and multinationals. It is increasingly common to watch morning television and see an interview with someone in another time zone and learn of a market collapse, or a bombing, a kidnapping, etc. With the strong visuals of global satellite television we are suddenly jolted awake and learn that something has happened during the night that will have an affect on us during our work day. What are the implications for Canadians as citizens, as workers; for government?
While most can recall the mantra of ‘thinking globally but acting locally,’ a question arises as to the role of nation-states. It may be that globalization is leading to a reversal of the mantra: it may be that the new reality is one where acting globally and thinking locally is all that nation-states can effectively manage.
The relative newness of globalization has caught governments off guard. It was thought that government could issue a policy here, monitor a development there and could, in general, muddle through. But global networks are transformative. Globalization challenges the authority of existing institutions.
The role of the nation state is being reviewed. With porous borders and blurring boundaries governments in the developed areas have to grapple with a host of issues that don’t lend themselves to easy solutions: the economic and political power of the multinationals; capital ‘flightiness’ to tax havens; harmonization among all countries leading to possible lowered wages and environmental controls; the opening up of the domestic labour force to global competition.
The New Wealth of Nations means that governments have to develop policies for the following propositions: That information has emerged as a strategic resource that leads to new ways of organizing and achieving consensus. That economic independence has given way to economic interdependence. That having a work force that knows how to use computers is just as important as having an economy that produces computers. That the range of information technologies that make up the information infrastructure of an economy can yield a competitive advantage in a complex, global, interdependent world where decisions and responses are taking place in ‘real time.’
A borderless world has emerged. Satellite communications and real time transactions have linked the global business centres. Services flow between countries. The technology is distance insensitive. When economies were based on ‘land, labour and capital,’ barriers could be set up to control the movement of goods, people and money, so as to protect and advance national interests. Is this still possible when everything is increasingly based on flows of electronic information through global networks? How can a nation promote the wealth and welfare of its citizens in the information age? What are ‘national interests’ in an increasingly globalized world?
Areas where national governments intervened in the past may no longer be possible or desirable in the borderless, global world of tomorrow. National jurisdictions may prove difficult or impossible to regulate; perhaps regulation can only be achieved at a different level: more local in some instances and more global in others.
Consider the emergence of global standards. Harmonization is taking place in many areas. Converging standards will affect the regulatory regimes of all countries. Ways of doing things that have gone on without question will be challenged by cheaper and faster methods of ‘doing business.’ Regulations concerning stock transactions and banking, environmental controls, occupational health and safety, etc., will be challenged as harmonization begins to take place. Will the world adjust to the best regulated countries, the worst, or somewhere in between. How will Canada cope? How will harmonization take place?