technology for making free trade thrive
was initially container shipping and in-termodal transport, lowering the cost
of physical transportation. Later, computing technology ushered in an era of
call centers, offshore software development, and business service delivery
from remote locations such as India.
The technologies at the forefront—
Computer Aided Design (CAD), Computer Aided Manufacturing (CAM), and
the Internet—facilitated the dispersion
of productive locations to design, manufacture, and provide after-sales service
of complex products such as aircraft.
The power of new technologies to
continue to promote geographically
dispersed production networks is here
to stay. But interestingly, new technologies may just as well be put to use
to facilitate proximate design and production. When speed-to-market and
reacting to covnsumer feedback in real
time are important, locating design
and production facilities close to final
markets makes sense. There are signs
of this happening. For example, the
sportswear maker Under Armour has
designers and manufacturers located
under one roof in Baltimore, MD, USA.
Adidas has one Speedfactory using robots in Ansbach, Germany, and another
similar factory in Atlanta, GA, USA; and
Nike’s New Manufacturing partnership
with Flextronics located in U.S. states
California and Tennessee appears to
be more and more about design and innovation, and less about low cost. And
of course, these proximate locations
create onshore jobs, which happens to
be compatible with the climate of neo-nationalism and protectionism.
It is the nature of the technology in
3D printing, robots, flexible manufac-Britain’s decision to exit the European
Union—so-called Brexit—creates uncertainty. While Britain may be doing
its best to keep its free trade flag flying,
doing so at the same time as exiting a
free trade zone undermines credibility.
From the perspective of developing
countries, exporting raw materials and
manufactured goods are as important as
ever for their prosperity. In a neo-liberal
world, the 19th-century German economist Frederich List’s memorable phrase
‘kicking away the ladder’ resonated with
many observers. In the past, rich industrialized nations got richer by using high
tariffs before lowering them. How can
we insist that poorer nations attempt
to industrialize without such protective ladders to climb up?
1 In the 2010s,
however, no nation is kicking away the
ladder. Rather, import substitution and
industrial policies—once seen to be the
preserve of developing economies—are
applied in different shapes and forms
around the world. Moreover, developing
nations continue to face significant barriers to trade in sectors other than manufacturing, notably exporting agricultural
produce to developed nations. Thus,
advocates of free trade have always tempered their demand by accommodating
the need to secure national sovereignty
and national interest.
The Digital Dimensions
of Protectionism
The preceding analysis may give the
impression the pendulum swinging
between free trade and protectionism
is all about geopolitics and conflict be-
tween nations. But that is only partially
correct. Technology—particularly digi-
tal technology—has played a great part
in enhancing international trade. The
digital dimension is highly relevant
to people who work in the computing
world. In some cases our attention to
this may be restricted to what might be
called “pure” digital services or prod-
ucts. But often it involves services or
products that depend on digital tech-
nology in their creation, delivery, or
use. In fact, the rapid incorporation
of the digital into many services and
products could be of greater signifi-
cance than anything “pure.”
As noted here, GATT and WTO fa-
cilitated the unprecedented growth in
international trade in the second half
of the 20th century. The key enabling
The power of new
technologies to
continue to promote
geographically
dispersed production
networks is
here to stay.
For further information
or to submit your
manuscript,
visit tsas.acm.org
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