Globalization of the Computer Industry

Introduction:

The topic we have chosen for poster presentation is “Globalization of Computer Industry” and its very important in today`s world because now days everything is done with computer and now days nothing can be done without computers in international business. Globalisation is a highly significant issue around the world. In the Academic Context Neo Liberal Economist are in support of globalisation and open markets but some scholars are against it because of its strong effect on workers, language, local companies and social institutions. According to Berger, et al., (1999) globalisation refers to “Tendencies towards the integration across borders of markets for labour, capital, goods and services and emergence in all of these markets of a common set of actors”.

The Four aspects of Computer industry are goods and services, labour, capital and technology. In goods and services it includes providing good services to customers, increasing per capita income of the country and e- commerce activities. In labour it includes providing employment to labours and in capital it includes foreign exchange and other modes of investment and in technology it includes artificial intelligence and new types of technology. The personal computer industry is one of the leading industry in the world with world class companies that expand in the main regions of the world . Since 1980 it is the most relevant segment in the electronic industry both in terms of industry organisation and innovation of new pattern of firms and also in the growth. The reason why we have chosen this topic is that it is very important and now a days business cannot progress without computers as everything is done on computers.

Importance of Globalisation of computer Industry:

The computer industry is the most dominant industry in the world due to the market leadership of international business machines. It was the IBM that created the computer with basic standard that ruled most of the world`s market. IBM also operated on the basis of product development , manufacturing responsibilities by plants globally and also on the basis of global rendering optimal. According to Longlois (1992) after the successful Apple II and to capture growing market , IBM created an open, modular architecture that give access to suppliers to develop components with the operating system and core CPU. Japan and Korea were less successful as global producers but were main suppliers of flat panel displays and memory chips. According to Survey conducted by Mc Millan et al (1999) the most relevant factor in determining where to do business are infrastructure(18%), political stability (17%), availability and skilled labour (17%), tax incentives(10%), closer to suppliers and customers (16%) and unskilled labour is only (3%).

Trends in Computer industry:

The main trends in computer industry are mass customization that means it results in faster respond to shift in demand for particular software and components than usual product lines. Outsourcing means companies are outsourcing to Asian countries to reduce cost like IBM outsourced the components like printed circuit boards and disk drives to reduce costs. E- commerce activities means it helps in increasing the demand for customization, compare price online and to make changes to products. These trends have an relevant effect on the computer industry. The current trends in computer industry are demand dynamics, market and distribution trends , new business plans , new technology and product directions.

Impact of computer Industry Downfall:

The examples of changes are Dell dismissed 5000 workers in Austin area but increased employment outside US. Compaq dismissed 8500 workers in Texas and 1750 workers in Europe . Apple reduced its work force but added worked to new company owned stores. Trends of industry downfall from dismissing workers are consolidation, Outsourcing and shift regional production to Asian countries to enter global market and to shift production to low cost countries.

Conclusion:

Globalization of computer industry is motivated by two factors and in that first one is to reduce cost in a highly priced globalised world and second one is to the ability to reach the global market. Due to globalization of computer industry prices become less for computer users and also technology diffusion have moved fastly . Last but not least globalization helps to maintain a competitive and creative industry environment by focusing on core capabilities and also help in achieving economies of scale.

References:

Berger, Suzanne, Sturgeon, Timothy, Kurz, Constanze, Voskamp, Ulrich and Wittke, Volker. (1999),”Globalisation, Value Networks and National Models”, MIT IPC Globalization Working Paper 99-000.

“Dell Transfers Desktop Production to China” Asia Port daily new ,25 September.p.40.

Pletz, John.(2001).” Dell computer`s Future Growth Will Occur Outside Of Texas, Chairman says,” Austin American Statesman,25 May.

Longlois ,Richard.(1992),” External Economies and Economic Progress: The Case of the Micro Computer Industry” Business History Review, 66(1): 1-50.

McMillan, Margaret, Pandolfi, Selina and Salinger, Lynn, B.,(1999),”Promoting Foreign Direct Investment In Labor- Intensive, Manufacturing Exports in Developing Countries,” CAER II Discussion Paper No. 42, Harvard Institute For International Development.

Fowler, Tom.(2001). “Compaq Doubles Up on Local Layoff Plans,” Houston Chronicle, 10 August, p.1.

(http://escholarship.org/uc/item/6wq2f4hx) Accessed on 2nd May 2010.

(http://web.mit.edu/ipc/www/globalization.html) Accessed on 3rd May 2010.