How does globalization affect the levels of technology in different parts of the globe? Does it lead to convergence in technology levels ...

In this paper, I will try to assess the effects of globalization on the levels of
technology in different parts of the globe. Current stage of globalisation allows for the
transmission of knowledge at a pace never seen before. New technologies, communication
channels like the Internet, or cheap travelling allow people and regions to share knowledge,
information, and technology. This paper asks whether this unprecedented level of
development leads to a convergence or a divergence in the technology levels. Moreover I
will assess whether globalisation leads to greater innovation. I will emphasize the concept of
disruptive innovation and reverse-engineering.
In order to satisfy my research aims, I will firstly describe the current state of
globalisation, the New economy, and the effect of increased trade on technology levels. Then
I will present some theoretical models: I will analyse the Solow growth model (which forms
the basis of any international growth theory), largely used in macroeconomics. The central
conclusion of the model is that long-run growth of output per worker depends only on
technological progress. Therefore it links the convergence of the technology levels with
wealth-creation. Then I will present alternative views on technology growth including the
total factor productivity. I discuss the endogenous growth theories, and the theory of free
market. In the second half of the paper, I will describe whether convergence in technology
levels occurs, and if it does not occur, then what are the reasons for the divergence. Moreover
I will try to find the link between knowledge and technology, and the level of innovations.
Finally I will discuss the role of multinational companies and government in technology
diffusion. There is a significant role of the multinational companies in technology
convergence. The role of government is more limited. We will discuss it in the final part of
the essay. The conclusion is that current level of globalisation is affecting the level of
technology more then ever before. However we don’t see technology convergence as
predicted by several theoretical models. On the other hand countries with lower level of
technology can benefit from the concepts of disruptive innovation or reverse-engineering.

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