Technology as an agent of Economic globalization

Globalization, as a complicated process, is not a new phenomenon and our world has experienced its effects on different aspects of lives such as economic, social, environmental and political from many years ago. Economic globalization includes flows of goods and services across borders, international capital flows, reduction in tariffs and trade barriers, immigration, and the spread of technology, and knowledge beyond borders. It is a source of much debate and conflict like any source of great power
— Parisa Samimi et al.

The interplay between technology and globalization can only be described as convoluted. In my last post, I examined how such convoluted interaction has affected education. The world has seen several technological advancements, whose effects have had global impacts on the world economy. The wide adoption of technological innovations has indeed lead to a paradigm shift both in theoretical underpinning guiding economic practices as well as economic policies. In truth, these impacts are either good, bad or ugly.

The good

The Internet

Source: Forbes

Advances in the design of electronic computers led to the invention of the internet in the mid-20th century, but not until the later part of the 20th century did the world realize the immense potential and huge array of opportunities the internet could avail any bright mind.

The internet gives a level playing field to all, connecting and aiding collaboration between great minds across the globe, thus aiding transfer of sparse knowledge and speedy innovation. The internet has impacted working habits, learning, trading and a host of other economic activities spurning an “Internet economy” which according to the Internet Association (see here), the Internet economy contributed a whopping $966.2 billion, or six percent, of real global GDP in 2014.

Algorithmic Trading

Source: Banker - anonymous
If not all, most of us are trading one asset or the other, it’s been a fun ride so far, until when you noticed your competitors are trading bots with immense capital, driving the market either up or down as they deem fit.

Algorithmic trading signals the rise of advance and intelligent robots capable of making informed decision learned from the previous dataset to predict subsequent prices of securities thus optimizing trading.

Advances in artificial intelligence, machine learning, and data mining did open up a new market and approach for hedge funds, investment companies and venture capitalist to optimize profits on their portfolios.

Topnotch investment companies and venture capitalist invest hugely in research and designing of proprietary algorithmic trading software since an intelligent bot eases trading of securities worth billions of dollars. A prime example of a frontier in algorithmic trading is the billionaire mathematician, quantitative analyst and hedge fund specialist — James Harris Simons.

Financial Institution

Source: digileaders.com

The financial sector, known for its tight control over operations and holding on to status quo is undergoing a disruption. In 2008, Satoshi Nakamoto published the now infamous paper "Bitcoin: A Peer-to-Peer Electronic Cash System" ( read it here ), a technical solution to the Byzantine fault tolerance problem, but also serving a digital asset i.e., cryptocurrency, a payment system, and the blockchain.

Advances in the blockchain technology like Ethereum’s implementation of smart contracts will have an immense impact on the future structure of financial institutions and changing the way we do business.

Smart contracts are computer protocols enabled by blockchains and distributed ledgers that facilitate, verify, or enforce the negotiation or performance of a contract, or that make a contractual clause unnecessary
— Wikipedia

With smart contracts, transactions can be locked down and verified without the need of a third party. These innovations have led companies to develop private blockchains for internal transactions. Also, companies are using the flexibility of smart contracts in crowdfunding ( Initial coin offer, ICO) for various project.

The bad

Cyberbullying

Over half of adolescents and teens have been bullied online, and about the same number have engaged in cyber-bullying. More than 1 in 3 young people have experienced cyberthreats online. Over 25 percent of adolescents and teens have been bullied repeatedly through their cell phones or the Internet
— BullyingStatistic.org

Clearly, every innovation and advancement come with a price. The advent of social interactions on the internet has had positive results, however, one negative is cyberbullying.

Source: Stopcyberbullying.org

Cyberbullying involves harassment of the internet, be it threats or embarrassment. Although there have been a lot of interest and research in how to combat cyberbullying, we are still far from attaining appreciable results.

Internet Fraud

Source: Yahoo.com

With many more people joining the global village- the Internet, everyday vices become rampant. One of such is internet fraud. This involves using dedicated and well-crafted schemes to steal valuable assets from people via the internet. One of such is the recent WannaCry Ransomware which locks down the infected gadgets until the owner pays around $300. Various approaches used by internet fraudsters have been identified here

The Ugly

Silk Road

Source: silkroaddrugs.org

Innovation is definitely empowering, however, it could empower certain bad actions. The dark web in which almost everything is disconnected from the usual internet is one of such. It helps create a secure system for research and lots more, however, it does create a secure system for cybercriminal activities. The silk road served as a secure network for sales of illegal drugs, with a valuation of over 144000 bitcoins.

The likes of technological usage like blockchains and Silk road seems to have usher many more of their kind. Only time will tell if we can erase the bad and the ugly and live with the good.

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