| In the
1800s, globalization leaped forward when steam power and international peace
lowered the costs of moving goods across borders. This triggered a
self-fueling cycle of industrial agglomeration and growth that propelled
today’s rich nations to dominance. That was the Great Divergence. The new
globalization is driven by information technology, which has radically
reduced the cost of moving ideas across borders. This has made it
practical for multinational firms to move labor-intensive work to developing
nations. But to keep the whole manufacturing process in sync, the firms also
shipped their marketing, managerial, and technical know-how abroad along with
the offshored jobs. The new possibility of combining high tech with low wages
propelled the rapid industrialization of a handful of developing nations, the
simultaneous deindustrialization of developed nations, and a commodity
supercycle that is only now petering out. The result is today’s Great
Convergence |
.png)
