globalisation of engineering design report

8/6/2019 Globalisation of engineering design report

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INTRODUCTION

Globalization is transforming the world we live in by opening up opportunities and

challenges. In the middle decades of the twentieth century globalization was largely driven bythe global expansion of multinational corporations based in the United States and Europe, and

worldwide exchange of new developments in science, technology and products, with most

significant inventions of this time having their origins in the Western world according to

Encyclopaedia Britannica. [1] Worldwide export of western culture went through the new

mass media: film, radio and television and recorded music. Development and growth of

international transport and telecommunication played a decisive role in modern globalization.

Technological changes have achieved advances in communication, information processing,

and transportation technology, including the Internet and the World Wide Web (www). The

most important innovation has been development in the microprocessors after that global

communications have been revolutionized by developments in satellite, optical fibre, and

wireless technologies, and now the Internet and the www. The rapid growth of the internet

and the associated www is the latest expression of this development.

The process of globalization and technological advancements reinforce each other, a linkage

called co-evolution. There are three main indicators of this co-evolution:

Technology Exploitation

Technology Generation

Technological Collaboration

Technology Exploitation: Multi National Corporations (MNCS) try to profit from their

innovations by taking their technological products and processes to other markets. As a

result, these other markets become globalized at a fast pace.

Technology Generation: MNCs often develop new technologies outside their home country.

Many MNCs have scattered their R&D activities in subsidiaries across the world and many

new patents are granted to technologies generated in a country other than the home country.

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Technological Collaboration: Most new technological inventions and innovations are results

of efforts of a multitude of firms, research institutions, universities, and individuals working

together. Such collaboration has been made possible by the technologies that are already in

place and has resulted in globalizing the scientific community. [2]

In just 25 years we went from a world of electric typewriters to one of laptop computers more

powerful than the mainframe computers of that era; from one of dial pay phones to GPS-

enabled cell phones; from 8-track cassette players to iPods. Without the ICT revolution,

globalisation as we know it would not be possible.

As Information and Communication Technologies (ICT) continues getting cheaper, faster,

better, and easier to use, organizations continuously find new and expanded uses for IT every

day, as the recent emergence ofYouTube illustrates. It has become pervasive in its use and its

impacts, going far beyond just the Internet and personal computers.

GLOBALISATION OF FINANCE

By the start of the 20th century, a global financial system was in place. Its existence was

necessitated by the fact that large scale engineering projects were undertaken in places far

removed from the investors, be it individuals or organizations. The scale of the projects, such

as the construction of major canals, required the involvement of multiple investors, and that,

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in turn, motivated the creation of financial market with instruments such as shares and bonds.

Information was also required by the investors to allow them to make qualified judgments

about the value of projects, commitments, etc.

An important role in international trade and finance is played by the national currencies andtheir exchange rates. Fixing these rates with respect to some reference provides stability for

the currency market, as e.g. pre-1914 due to the classic gold standard, and during the twenty-

five-year period following World War II, when a system of fixed exchange rates pegged to

the dollar prevailed [3].

Today, information technology enables the creation of a host of tools to create, manipulate,

organise, transmit, store and act on information in digital form in new ways and through new

organizational forms. As a result, Information and Communication Technologies (ICT) has

transformed the internal operations of organizations (business, government and non-profit);

transactions between organizations; and transactions between individuals, acting both as

consumers and citizens, and organizations. The revolution in ICT led to the ease of financial

transactions. Electronic trading was introduced which uses information technology to bring

together buyers and sellers through electronic media to create a virtual market place. These

electronic systems make it easier to allow different companies to trade with one another, no

matter where they are located. Etrading is widely believed to be more reliable than older

methods of trade processing [4].

Also increasing foreign investment can be used as one measure of growing economic

globalization. The top investing countries in the 1990s have been the United States, the

United Kingdom, France, Germany and Japan. Then emergence of China in global arena has

a significant and far-reaching impact on the wider economy of the world. Starting from abaseline of less than $19 billion just 20 years ago, FDI in China has grown to over $300

billion in the first 10 years. China has continued its massive growth and is the leader among

all developing nations in terms of FDI [5].

Figure below shows net inflows of foreign direct investment.

FDI Inflows[6]

:

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GLOBALISATION OF MARKETS

Indeed, The ICT revolution has enabled business to run over electronic systems such as the

Internet and othercomputer networks where anyone can buy or sell products (also known E-

Commerce). A large percentage of electronic commerce is conducted entirely electronically

for virtual items such as access to premium content on a website, but most electronic

commerce involves the transportation of physical items in some way. Online shopping is a

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form of electronic commerce where the buyer is directly connected and online to the seller's

computer usually via the internet. For example ebay.com, Amazon.com[7].

The technology revolution has not only improved our communications system, it made it

more economic to ship products. Not only is the cost of shipping a pound of pig iron from

Australia to Zaire cheaper, but as the weight-to-value ratio of products has increased costs as

a share of total costs has declined. When most of the value of the economy was made up of

heavy things that did not cost much (e.g., cement, wood, fish, commodity steel), it made little

sense to ship them very far. But as the economy has become increasingly made up of lighter

things that cost more (e.g., computer chips, airplanes, drugs) it is now economical to ship

them around the globe. The second important technological contributor is air travel. The

volumes of passenger and freight air traffic worldwide continue to grow exponentially, as

they have done now over several decades.

At the epicentre of globalization has been the multinational corporation. A company doesnt

have to be the size of multinational giants to facilitate and benefit from the globalization of

markets. It is important to offer a standard product to the worldwide. But very significant

differences still exist between national markets like consumer tastes, preferences, legal

regulations, cultural systems [8].

These differences require that marketing strategies in order to match the conditions in a

country. To illustrate, Wal-Mart may still need to vary their product from country depending

on local tastes and preferences.

In 2008, the top 10 largest non-financial multinationals ranked by total foreign assets

(millions of dollars) [9] were:

Ranking Corporation Home Economy Foreign Assets Total Assets

1. General Electric United States 401 290 797 769

2. Royal Dutch

Shell

United Kingdom 222 324 282 401

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http://en.wikipedia.org/wiki/General_Electrichttp://en.wikipedia.org/wiki/Royal_Dutch_Shellhttp://en.wikipedia.org/wiki/Royal_Dutch_Shellhttp://en.wikipedia.org/wiki/General_Electrichttp://en.wikipedia.org/wiki/Royal_Dutch_Shellhttp://en.wikipedia.org/wiki/Royal_Dutch_Shell


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3. Vodafone Group United Kingdom 201 570 218 955

4. BP United Kingdom 188 969 228 238

5. Toyota Motor Japan 169 569 296 249

6. ExxonMobil United States 161 245 228 052

7. Total France 141 442 164 662

8. E.On Germany 141 168 218 573

9. lectricit deFrance

France 133 698 278 759

10. ArcelorMittal Luxembourg 127 127 133 088

GLOBALISATION OF PRODUCTION

In the course of the 20th century the world witnessed the progressive involvement of new

territories and populations in the global economic process. This expansion was driven by the

relentless requirement to reduce costs and improve competitiveness. Recognizing situations

when labour costs constitute a substantial fraction of the total manufacturing expenditure,

large and small companies sought the possibilities of moving some of their production to

locations where labour was cheap and readily available. The longer term consequences of

such activities were profound and manifold. On the one hand, this brought to the poor regions

not only jobs, but eventually also the increase in the wealth of the local population.

Ultimately this inevitably resulted in higher salaries, and served to undermine the original

motivation for moving the manufacturing facility at a particular locale: the labour was no

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http://en.wikipedia.org/wiki/Vodafone_Grouphttp://en.wikipedia.org/wiki/BPhttp://en.wikipedia.org/wiki/Toyota_Motorhttp://en.wikipedia.org/wiki/ExxonMobilhttp://en.wikipedia.org/wiki/Totalhttp://en.wikipedia.org/wiki/E.Onhttp://en.wikipedia.org/wiki/%C3%89lectricit%C3%A9_de_Francehttp://en.wikipedia.org/wiki/%C3%89lectricit%C3%A9_de_Francehttp://en.wikipedia.org/wiki/ArcelorMittalhttp://en.wikipedia.org/wiki/Vodafone_Grouphttp://en.wikipedia.org/wiki/BPhttp://en.wikipedia.org/wiki/Toyota_Motorhttp://en.wikipedia.org/wiki/ExxonMobilhttp://en.wikipedia.org/wiki/Totalhttp://en.wikipedia.org/wiki/E.Onhttp://en.wikipedia.org/wiki/%C3%89lectricit%C3%A9_de_Francehttp://en.wikipedia.org/wiki/%C3%89lectricit%C3%A9_de_Francehttp://en.wikipedia.org/wiki/ArcelorMittal


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longer cheap. On the other hand, the increase in wealth led to the emergence of a local

consumer market, opening up the possibilities for sales and further wealth creation.

Gradually the new consumer markets became more diversified and sophisticated. Ultimately

such markets demanded the development of new bespoke products. This laid down thefoundations for the globalization of the engineering process itself.

While the manufacturing industry has been outsourcing work to low-wage countries and

investing in high wage countries, manufacturing jobs in the U.S. have been falling. Major

computer firms such as Dell, HP, IBM and Gateway have all outsourced or off shored their

help desks centres in order to lower operating costs. Software companies Microsoft, Oracle

and SAP have all globalized to lower operating costs as well as use "follow the sun" support.

Having analysts in nearly all time zones and ICT revolution allow software companies to

continue working and supporting products 24 hours a day. A commonality for the strong

growth in software firms in developing countries is the high number of technology and

engineering graduates. The surpluses of graduates were willing to be paid much less than

those in well-developed countries. Companies within the industry quickly saw an opportunity

to cut costs and operate globally at the same time. Although controversial, a potential success

factor is the role of these multinational companies. Arora's and Gambardella's article states

companies "went to Israel to do R&D, to India for inexpensive skilled workers, and to Ireland

to leverage tax incentives and access the European market"[10]

In 20th century Multinational Corporations drives the globalisation of production. MNC

affiliates tend to adopt larger scales of production and these emit less pollution per unit of

output; they tend to use imported capital equipment with embodied environmental

technologies; and their plants tend to be more efficient in use of energy and raw materials.

In fact, in todays integrated global economy, the capital intensity of production is heavily

constrained by the choice of product: if you want to produce petrochemicals efficiently you

have to use the latest technology.

One can analyse this by looking at the technology of foreign companies in comparison with

local companies. Eseland and Harrison (1997) found that foreign plants in four developing

countries (Mexico, Morocco, Cote dIvoire, and Venezuela) are significantly more energy-efficient and use cleaner types of energy than their domestic counterparts [11].

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GLOBALISATION OF ENGINEERING DESIGN

Engineering technologies create the basis for globalization, but they themselves become

involved in the resulting global pattern of research and development activities .

Technologies like the steam engine, railroads, electricity and the internal combustion engine,

and steel are all examples of technologies that drove economic transformation and growth in

the past. The modern industrial economy of the early 1990s was impossible without the

emergence of technologies like steel and electricity. The emergence of cheap steel in the1880s and 1890s transformed not just the steel industry, but also almost all manufacturing,

since a wide array of industries, such as bicycles, sewing machines, and machine tools, could

now take advantage of high-strength steel.

With the building of interstate highways, metropolitan regions and finally the entire nation

were tied together. Widespread electrification allowed industry much greater location

freedom. The development of air conditioning made living and working in hot southern and

western climes more tolerable.

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Additionally, the spread of mechanization and chemicalization to the farm drove

agricultural productivity.

The automobile industry, for example, has significantly expanded the electronics and

computer content on the vehicle, with applications today ranging from power train controlsfor improved fuel economy and reduced emissions, to enhanced safety systems and chassis

controls, to on-board communications systems like OnStar [12].

However, some engineering design activities necessarily took place locally. The nature of

such activities was peculiar and restricted. Lynn and Salzman [13] give the example of a

Whirlpool facility in India, where washing machines were redesigned to keep out rats, to

survive shipment on bad roads, and to cope with power ebbs and surges in electrical current.They further assert that engineering managers at an electronics firm in India did not consider

doing work on their more advanced technologies at a site in India because, until recently,

there was no market in India for products based on the newer technologies, and no sense that

India provided a viable export platform.

Despite the many significant benefits afforded by access to the Worldwide Web, there is a

dark side to the Internet and other new communication technologies. In the U.S., Internet

fraud has grown to more than $6 billion annually and is expected to reach $1 trillion in a few

years. A major problem for the FBI in dealing with this problem is that the perpetrators can

be outside the United States and yet cause major damage inside the U.S. or inside the

computer network of a major corporation. As corporations expand their computer networks to

reach overseas units and alliance partners, they will have to be certain that their "cyber walls"

are secure. To deal with this growing worldwide cyber problem, the FBI now has offices in

44 countries around the world [14].

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CONCLUSION

Globalisation is wonderful reality that is evolved with rapid and pervasive technological

innovation. By this it is meant that changes in technological advancement appear to have

helped create increasingly global markets and other institutions, and these ever more global

political and economic institutions appear to modify emerging technological innovations.Globalisation should be focussed on raising productivity for all sectors, and making sure that

all individuals can benefit from this growth. If that happens, developed and developing

nations will benefit greatly.

Technology is continuously breaking old barriers and offering new frontiers of opportunities.

Information technology, combined with other technologies, will continue to drive

globalization. New technologies may come not just from the developed countries, but also

from the developing countries, such as China and India. Worldwide interaction of knowledge

bases and breakthrough in distance learning from technology has made globalisation much

easier. Overall, Technology has provided continued benefit for human race.

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REFERENCES

1) History of Technological discoveries, Website of Encyclopaedia Britannica

http://www.britannica.com/EBchecked/topic/1350805/history-of-technology ,

2) Daniele Archibugi, Carlo Pietrobelli.The Globalisation of technology and its

implications for developing countries.

(http://www.danielearchibugi.org/downloads/papers/Globalisation_of_techn_and_scie

nce/Globalisation_of_technology.pdf)

3) M. Flandreau, C.-L. Holtfrerich, and H. James.International Financial History in the

Twentieth Century: System and Anarchy. Cambridge: Cambridge University Press,

2003, pages 278.

4) Ian Salisbury and Geoffrey Rogow, Gliches Cancel Electronic Trades, The Wall

Street Journal, September 25, 2008, p. D3.

5) News article, CBC News, Foreign Direct Investment in China jumps 32%.

http://www.cbc.ca/money/story/2009/12/15/china-foreign-investment.html

6) Globalisation ,Website of International Trading Centre

http://training.itcilo.it/actrav_cdrom1/english/global/globe/main.htm

7) Electronic Commerce, Website of Wikipedia,

http://en.wikipedia.org/wiki/Electronic_commerce

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http://www.danielearchibugi.org/downloads/papers/Globalisation_of_techn_and_science/Globalisation_of_technology.pdfhttp://www.danielearchibugi.org/downloads/papers/Globalisation_of_techn_and_science/Globalisation_of_technology.pdfhttp://en.wikipedia.org/wiki/Wall_Street_Journalhttp://en.wikipedia.org/wiki/Wall_Street_Journalhttp://en.wikipedia.org/wiki/Wall_Street_Journalhttp://www.cbc.ca/money/story/2009/12/15/china-foreign-investment.htmlhttp://en.wikipedia.org/wiki/Electronic_commercehttp://www.danielearchibugi.org/downloads/papers/Globalisation_of_techn_and_science/Globalisation_of_technology.pdfhttp://www.danielearchibugi.org/downloads/papers/Globalisation_of_techn_and_science/Globalisation_of_technology.pdfhttp://en.wikipedia.org/wiki/Wall_Street_Journalhttp://en.wikipedia.org/wiki/Wall_Street_Journalhttp://www.cbc.ca/money/story/2009/12/15/china-foreign-investment.htmlhttp://en.wikipedia.org/wiki/Electronic_commerce


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8) Parisa Gilani, Yasamin Razeghi, Shahid Beheshti, 2010, Global manufacturing:

creating the balance between local and global markets. Journal of Assembly

Automation, 30(2), 0144-5154, p. 103-108.

9) World Investment Report, Website of United Nation Conference on Trade and

Development, http://www.unctad.org/Templates/Page.asp?

intItemID=2443&lang=1&print=1

10) Arora A., & Gambardella A. (2005). The globalization of the software industry:

Perspectives and opportunities for developed and developing countries.

11)Richard Newfarmer (Economic Adviser), Multinational Corporations, Globalisation

and Poverty.

http://info.worldbank.org/etools/docs/library/89443/Tu_0601/Newfarmer.pdf

12)Larry J Howell,Jamie C Hsu.Research Technology Management. Arlington: Jul/Aug2002. Globalization within the auto industry, Vol. 45, Iss. 4; pg. 43, 7 pages.

13)L. Lynn, H. Salzman, The New Globalization of Engineering: How the Offshoring

of Advanced Engineering Affects Competitiveness and Development, 21st European

Group for Organizational Studies (EGOS) Colloquium, Berlin, 2005

14)Data regarding Internet Fraud, Website of Federal Bureau of Investigation ,United

States

http://www.fbi.gov/publications/financial/fcs_report2006/financial_crime_2006.htm

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globalisation of engineering design report

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