Globalisation, Development, and Technology

67
CHAPTER 4
Globalisation, Development,
and Technology
Figure 4.1. The Global Engineer.
4.1 INTRODUCTION
In this chapter, we will explore the global context in which we find ourselves working as engineers.
When we start thinking about a global context, we often come across the word ‘globalisation’ and
‘developing countries’ – also the ‘third world.’ Before we can understand any issues of relevance to
68 CHAPTER 4. GLOBALISATION, DEVELOPMENT, AND TECHNOLOGY
our profession, it is important to focus on some of the key global players and to look at some of these
terms in detail.
The term ‘Third World’ is a term used along with First World and (to a much lesser extent).
Second World to divide countries into three broad socio-political and economic categories.The third
world referred to those countries especially in Latin America, Africa, Oceania, and Asia, which were
not aligned with either the Soviet nor American blocs during the Cold War. The term was created
in 1952 by Alfred Sauvy, a French demographer. Today the more common term is developing or
underdeveloped countries and the term is synonymous with all countries in the developing world,
independent of their political status.
Some people disapprove of the term “developing countries” as it implies that industrialization
is the only way forward, and they believe it is not necessarily the most beneficial model. They prefer
the term ‘Global South.’
The major players in global economics, often criticized for being too powerful and US centric,
are the World Bank, the World Trade Organisation (WTO) and the International Monetary Fund
(IMF).
The World Bank represents five international organisations who provide advice to countries
for economic development and poverty reduction:
• the International Bank for Reconstruction and Development (IBRD), established in 1945,
• the International Finance Corporation (IFC), established in 1956,
• the International Development Association (IDA), established in 1960,
• the Multilateral Investment Guarantee Agency (MIGA), established in 1988 and
• the International Centre for Settlement of Investment Disputes (ICSID), established in 1966.
Governments can choose which of the above to sign up to. The IBRD has 184 members,
whilst the others have between 140 and 176 member governments.
The World Bank is part of the United Nations system. Its governance structure is different,
however, as each institution in the World Bank Group is owned by its member governments. Each
one subscribes to its basic share capital, with votes proportional to shareholding – Membership giving
voting rights that are the same for all countries. However, there are additional votes which depend
on financial contributions to the organisation and as a result, the World Bank is controlled primarily
by developed countries, while clients have almost exclusively been developing countries.
The International Monetary Fund (IMF) describes itself as ‘an organisation of 184 countries,
working to foster global monetary cooperation, secure financial stability, facilitate international trade,
promote high employment and sustainable economic growth, and reduce poverty.’ With the exception of North Korea, Cuba, Liechtenstein, Andorra, Monaco, Tuvalu and Nauru, all UN member
states either participate directly in the IMF or are represented by other member states. The IMF
monitors exchange rates and balance of payments, as well as offering technical and financial assistance.
4.2. THE INDUSTRIAL REVOLUTION (1760-1830) 69
The World Trade Organisation (WTO) is an international, multilateral organisation, which
sets the rules for global trading. It resolves disputes between member states. WTO formed out of
the GATT (General Agreement on Tariffs and Trades). The WTO has 150 members (76 members
at its foundation with 74 members joining over the next ten years). The 25 states of the European
Union are represented also as the European Communities. All three of the above organisations
were formed at the United Nations Monetary and Financial Conference in Bretton Woods, New
Hampshire, United States, on July 22, 1944.
Challenge Box: Find an article in the newspaper which mentions the IMF or World bank. Try to ascertain the ‘position’
(as discussed in the last section), of the journalist and of the
newspaper.
4.2 THE INDUSTRIAL REVOLUTION (1760-1830)
‘the more complicated industrial production became, the
more numerous were the elements of industry, the supply
of which had to be safe guarded. Three of these, of
course, were of outstanding importance: labour, land and
money. In a commercial society their supply could be
organized in one way only: by being made available for
purchase. Hence they would have to be organized for
sale on the market – in other words as commodities. The
extension of the market mechanism to the elements of
industry – labour, land and money, was the inevitable
consequences of the introduction of the factory system in
a commercial society. …..labour is the technical term
used for human beings, insofar as they are not employers
but employed….all along the line human society had
become an accessory of the economic system’ Polyani,
2001, p78
it is this.. machinery, the tool
or working machine, with
which the industrial
revolution of the eighteenth
century began’
Marx (Capital 494)
70 CHAPTER 4. GLOBALISATION, DEVELOPMENT, AND TECHNOLOGY
The history of engineering is often considered to be divided into four phases:
Pre-scientific revolution: Master builders and Renaissance engineers, e.g., Leonardo da Vinci.
Industrial revolution: (1760-1830). The change from craftsmen to engineers and increase of
mass production, introduction of factories.
Second industrial revolution: (1830-1930) chemical, electrical, and other science-based engineering branches developed electricity, telecommunications, cars, airplanes.
Information revolution: (1950 – present day) microelectronics, computers, and telecommunications jointly produced information technology or IT.
There are many differing views about the first Industrial Revolution. In many engineering
text books, it is presented as the most wonderful era of invention and discovery – the beginning of
the modern world and the creation of engineering as we know it. To others, it was the beginning of
the relationship between capitalism and engineering. To the workers, it was a time of great misery.
The factory developed and increasing numbers moved to the cities to become workers.Housing
in the cities was not adequate, and there was abundant child labour. Gender roles would also become
defined as men would increasingly work away from home. This does not seem very different to what
we call development in many parts of the world today.
The reports of the Commission (Factories’ Inquiry Commission of 1833) touching this barbarism
surpass everything that is known to me in this line.. The consequences of these cruelties became
evident quickly enough.The commissioners mention a crowd of cripples who appeared before them,
who clearly owed their distortion to the long working-hours. This distortion usually consists of a
curving of the spinal column and legs, and is described as follows by Francis Sharp, M.R.C.S., of
Leeds:
“Before I came to Leeds, I had never seen the peculiar twisting of the ends of the lower part
of the thigh bone. At first I considered it might be rickets, but from the numbers which presented
themselves, particularly at an age beyond the time when rickets attack children (between 8 and 14),
and finding that they had commenced since they began work at the factory I soon began to change
my opinion. I now may have seen of such cases nearly 100, and I can most decidedly state they were
the result of too much labour. So far as I know they all belong to factories, and have attributed their
disease to this cause themselves.”
“Of distortions of the spine, which were evidently owing to the long standing at their labour,
perhaps the number of cases might not be less than 300.”
Engels (Conditions of the Working class in England) 2004
4.3 ENGINEERING AND DEVELOPMENT IN 19TH CENTURY
Once the industry had been developed in the UK, it was possible for the British to expand their
developments to other countries. We are not going to discuss the British Empire in any detail but
just look at one important period of famine and consider the role engineers played with the disaster.
In 1876, the monsoon failed to arrive in Madras, and millions starved to death. Davis, amongst other
4.3. ENGINEERING AND DEVELOPMENT IN 19TH CENTURY 71
scholars believe that the drought that occurred did not have to cause a famine and in fact, only has
been done through the poor management of a country. India had suffered many droughts before
and the local farmers were able to survive by careful management and storage of their grain.
‘Failure of crops, of course, was
part of the picture, but dispatch of
grain by rail made it possible to
send relief to the threatened
areas; the trouble was that the
people were unable to buy the
corn at rocketing prices, which on
a free but incompletely organize
market were bound to be a
reaction to a shortage. In former
times small local stores had been
held against harvest failure, but
these has been discontinued or
swept away into the big
market….Under the monopolists
the situation had been fairly kept in
hand with the help of the archaic
organization of the countryside,
including free distribution of corn,
while under free and equal
exchange Indians perished by the
millions’. (Polyani, 2001, p160)
Figure 4.2. Karl Polanyi.
What does any of this have to do with engineering? Much, Davis would say. Modernization
was just happening and thousands of miles of railroad track and canal had just been created. The
trains, instead of helping to improve the situation and bring food to the starving, were in fact used
to take grain away to Britain. The canals which replaced well irrigation were an ecological disaster.
Short term wheat growth benefited, but without proper underground drainage, the capillary action
of the irrigation brought toxic alkali salts to the surface, which caused extreme ‘saline efflorescence.’
Canal embankments blocked natural drainage and created ideal breeding grounds for mosquitos
thereby proliferating malaria. Davis tells us that the British Army engineers were amazed at the
72 CHAPTER 4. GLOBALISATION, DEVELOPMENT, AND TECHNOLOGY
‘drought was consciously made into famine by the decisions taken in palaces
of rajas and viceroys…. but with equal justice the same criminal charges could
be (and were) lodged against the British administration..
…‘Early and energetic organization of relief and above all, the deferment of
the collection of land tax might have held mortality to a minimum’’ p51 Davis
(2002)
Figure 4.3. Rama Varma I.
4.3. ENGINEERING AND DEVELOPMENT IN 19TH CENTURY 73
Figure 4.4. Mike Davis.
74 CHAPTER 4. GLOBALISATION, DEVELOPMENT, AND TECHNOLOGY
skill with which previous generations had conserved water because they themselves had only made
things worse (The Times, 1877, in Davis, 2002, p335).
Can we blame the engineers? Certainly, many of them were just doing their job, assigned
to them by their superiors. However, we now realize that it is critical to understand our jobs and
the effects that they will have on local culture, on climate conditions, on the environment, and on
people’s lives. We are professionals and, therefore, should be making professional decisions. It is now
largely considered irresponsible to blame the boss for decisions. They may be doing terrible things
but you don’t have to work for them. In the next section, we will look at the situation in the world
today, and we will see that engineers are still causing a lot of harm by not asking the right questions
about what they are doing and why.
4.4 ENGINEERING AND DEVELOPMENT IN 21ST CENTURY
In this section, we are going to consider contemporary views on development or what is known as
‘post development theory’ and the implications that these have for the engineering profession. But
first, our adaptation of a small story that has become notorious amongst development engineers.
One day, in a small village in a very poor country far away Army engineers had finished their work
and had a few days holiday before leaving for home. During their stay in the village, they had
noticed that the local women would walk a very long way each way to fetch water from the river.
The engineers wanted to help the women in the village they had come to respect. They decided to
dig a well with a pump in the centre of the village so that the women could get their water right
outside their doors. Then they went home. Six months later they heard of a suicide in the village.
The women had needed the time and space that the walk to the river provided, away from their
husbands and their constant chores. Now their husbands would not stand for their chatter and
time wasting by the well, in front of their own eyes. The army engineers had not thought about
any negative implications of their deeds, so keen to do good.
Challenge Box: Check the labels on your clothing. Where
was it made? Do you know the conditions of the workers who
made your clothing?
4.4. ENGINEERING AND DEVELOPMENT IN 21ST CENTURY 75
It is not always obvious that we might cause a negative effect. Many scientists and engineers
will say that they cannot be held responsible for bad effects of their work down the line. We deal
with this more in Volume 2 but suffice to say that we as authors of the book think this is a poor
excuse. Below we present various views of development as summarized by Leftwich (2000).
‘Development seems to defy definition, although not for a want of definitions on offer. ..development
is construed as ‘a process of enlarging people’s choices,’ of enhancing ‘participatory democratic processes’ and the ‘ability of people to have a say in the decisions that shape their lives’ ..simultaneously,
however, development is defined as the means to ‘carry out a nation’s development goals’ and of
promoting economic growth. Given that there is scarcely a ‘Third World’ dictatorship not at least in
part attempt to legitimize its mandate to rule in the name of development .. it is little wonder that
we are thoroughly confused by development studies texts as to what development means’ (page 3,
Cowen and Shenton, 1996).
Development
is the
exploitation
of natural
resources to
serve the
home
countries. Its
of benefit to
all – good for
the colonies
and the
coloniser
Figure 4.5. Exploitation of natural resources.
76 CHAPTER 4. GLOBALISATION, DEVELOPMENT, AND TECHNOLOGY
Development is
historical progress- the
improvement in
material circumstances, scientific
understanding and
increasingly, individual
freedom, quality and
autonomy- progressive changes in political relations and social
structure of societies
Figure 4.6. Digging for gold: progress is always good.
Development is a
condition-the level of
socioeconomic and
possibly political
achievement which
societies have
attainned. Societies
may be ranked
according to their
position along a
continuum
Figure 4.7. Ranking of societies.
4.4. ENGINEERING AND DEVELOPMENT IN 21ST CENTURY 77
Capitalists, informed by
positivism, should act
as the trustees for the
wealth of society and
the amerioloration of
the social crisis (that
accompanies the rapid
movement of population
towards urban centres
of industrial production).
Industrial production
and organisation are a
historically given part of
the movement towards
an organic, positive ,
natural stage of society
in Europe. (Comte and
the Saint Simonians, p
116, 117, Cowan and
Shenton, 1996).
Figure 4.8. The trustees of society.
Development is a constant process of
progressive change. Development is
therefore a relative concept and is a
process. Countries should not get judged
as to their developed status
Figure 4.9. Progressive change.
78 CHAPTER 4. GLOBALISATION, DEVELOPMENT, AND TECHNOLOGY
Development as
economic growth
which will benefit
society by bringing
about ‘improvement in
the productive powers
of labour.. so that
more and more people
could enjoy a greater
share of the
necessities and
conveniences of life’
(104-5, Smith 1776 p
27 Leftwich, 2000 ).
Development is
therefore considered
in terms of GNP
(Gross National
Product or income per
capita).
Figure 4.10. Labour power.
Development as modernization
where modernization may be
seen as the structures and
processed by which societies
move from traditionalism to
modernity
Figure 4.11. Thoroughly Modern Millie.
4.4. ENGINEERING AND DEVELOPMENT IN 21ST CENTURY 79
Development is a shift in
the structure of an
economy e.g. agricultural
to industrial – a structural
change related to
industrialization. Further
structural change might
occur as we move from
heavy industry to services.
Figure 4.12. The attraction of the urban environment.
‘Technological development is not automatic. It is the product of conscious and unconscious choices
and decisions,all of which take place within a social and historical context.The notion that technology
can be transferred without modification has few historical precedents to support it.’(Veblen in Noble,
p78, 81.)
Figure 4.13. ‘Actually the machines we are replacing you with can put love into the pies!’
80 CHAPTER 4. GLOBALISATION, DEVELOPMENT, AND TECHNOLOGY
Challenge Box: What are your views on development?
Question your assumptions.
Dams are a major example of development.They offer a one-off technical solution to irrigation,
flood control and power generation. Smillie (1991) discusses the development of Egypt’s Aswan high
Dam in 1970 (p39), which had many side effects not previously anticipated including pollution of
drinking water and the destruction of the sardine industry. Furthermore, the Three Gorges Dam
on Yagntze river – promised to be the worlds biggest ever power development. An 11 million study
carried out through CIDA (Canadian International Development Agency) recommended go ahead.
Opposition was considerable, and an organisation called Probe International obtained a copy of the
report (by using the Canada Access to Information Law) and got together a panel of experts then
to published ‘Damming the Three Gorges; What Dam Builders Don’t Want You to Know.’ It dealt
with issues of resettlement, flood control, design and safety and showed that economic human and
ecolological costs had been under estimated and benefits overstated.
CIDA withdrew but the development is going ahead. When completed, the $25 billion
Three Gorges Dam on the Yangtze River will be the largest hydroelectric dam in the world. With an
installed generating capacity of 18,200 MW, the dam will span more than two kilometers across, and
tower 185 meters above, the world’s third longest river. Its reservoir will stretch over 600 kilometers
upstream and force the displacement of more than 1.3 million people. Construction began in 1994
and is scheduled for completion by 2009. Construction on the dam itself was completed in May
2006.
Demolition in Guizhou, Central China
Smoke and dust rise after demolition efforts begin in the town of Guizhou in Central China’s
Hubei Province to make way for the Three Gorges Dam Project.The project has been plagued by
massive corruption problems, spiraling costs, technological problems, human rights violations and
resettlement difficulties. One million people have been displaced by the dam as of 2006; many are
living under poor conditions with no recourse to address outstanding problems with compensation
or resettlement. Said one peasant from Kai county, “We have been to the county government many
times demanding officials to solve our problems, but they said this was almost impossible.They have
4.4. ENGINEERING AND DEVELOPMENT IN 21ST CENTURY 81
threatened us with arrest if we appeal for help from higher government offices.” The environmental
impacts of the project are extensive. The submergence of hundreds of factories, mines and waste
dumps, and the presence of massive industrial centers upstream are creating serious pollution problems in the reservoir and the tributaries of the Yangtze. For five months every year when high water
levels are lowered to accommodate the summer floods, a festering bog of effluent, silt, industrial
pollutants and rubbish will remain in the previously submerged areas. This will create a breeding
ground for flies, mosquitoes, bacteria and parasites, threatening the health of surrounding populations. Despite protests by Chinese citizens and media scrutiny of the project’s impacts, private banks
and export credit agencies have provided considerable financial support for the Three Gorges Dam.
IRN has worked to call attention to the project’s enormous environmental and social impacts and
to lobby financial institutions to refrain from supporting the project.’
http://www.irn.org/programs/threeg/
Whether we see development as growth, domination, exploitation, inevitable or forced, we
have little choice but to understand as much as we can about it and learn about what part we are
playing. Many engineers inadvertently join in with some role of development that they didn’t really
understand they were playing. Engineers do many good things which contribute to a cleaner, safer
world and for that we should be proud. However, engineers also for example, make the machines
which are used in sweat shops. Engineers create the machines which are used to replace workers
and so create more unemployment. Engineers build factories which cause health and environmental
hazards. Engineers create factories in towns and cause villagers to move away from their families to
find work. Engineers contribute more than possibly any other profession (apart from business itself )
to the movement of capital throughout the world which causes all developing countries to become
increasingly market driven. These are what we need to guard against, are responsible for and can do
something about.
Schumacher introduced the notion of small is beautiful in 1955 and in 1961 came into
contact with some of India’s leading Gandhians. He began to articulate Intermediate Technology.
The group of followers incorporated itself as a nonprofit company and called themselves ITDG
(Intermediate Technology Development Group) – today called ‘Practical Action.’ It was intended
to create appropriate technology – non capital intensive, small in scale, simple, non violent, with no
negative social or environmental side effects. Some insist on a clear distinction between Appropriate
Technology and Intermediate Technology. Smillie (1991) suggests that Intermediate Technology
simply stands somewhere between what is known and the modern whereas the term Appropriate
Technology often had strict rules applied to make it ‘appropriate.’ Actors in this area, he suggests
became rather dogmatic to the point that none of the things Schumaker worked on would actually
have passed the test. By 1980, there were 1000 institutions with an appropriate technology focus
but weaknesses appeared. Smillie believes that The Appropriate Technology movement seemed to
develop an uncritical coalition with those who had become disillusioned with mainstream industrial
and technological development and who wanted an alternative lifestyle. ‘Henry David Thoreau did
not brave the harsh frontier. He may have lived a bucolic life in the Massachusetts woods, but even
82 CHAPTER 4. GLOBALISATION, DEVELOPMENT, AND TECHNOLOGY
Figure 4.14. Local appropriate technology being developed.
in 1845, the woods were not far from civilization and the pond was not far from his mothers house
when he often had dinner when his own larder was bare..’ Smillie believes Thoreau, for instance, was
more concerned with trees than people. This is ever more true today where we often see alternative
lifestyle, ‘off the grid’ environmentalists believing that they have the same aims as those who wish
to make changes to existing structures to alleviate social and environmental problems.
4.4. ENGINEERING AND DEVELOPMENT IN 21ST CENTURY 83
Figure 4.15. Housing in Lesotho.
John Parry, one of the original board of directors of ITDG formed a construction materials groups
in 1982 which is still active (Smillie, page 156).
http://www.parryassociates.com/
Due to a huge demand for inexpensive, durable, roofing materials, Parry created a natural
fibres concrete alternative. He decided to go into equipment production when he found that the
required equipment was not being made properly in Ghana and the tiles would not fit together, etc.
Some criticised him, believing that the manufacture of equipment should be in the third world, but
his motives were not for profit. He trains people to use the equipment in their home country. One
air hostess from Ghana trained in between flights before investing in the equipment.
84 CHAPTER 4. GLOBALISATION, DEVELOPMENT, AND TECHNOLOGY
Challenge Box: Can you find any other examples of engineers who are actively trying to use their skills to support
justice, i.e., changes which will permanently bring more equity to the people they are working with, rather than charity
which helps them only short term.
4.5 GLOBAL VIEWS OF GLOBALISATION
Figure 4.16. The global marketplace.
There are many different views about what globalisation means as there are countries involved
and we present some summaries of Brawley (2003). More detail can be found in his text.
4.5. GLOBAL VIEWS OF GLOBALISATION 85
Furthermore, there are many different lenses through which we might look at globalisation
even if we agree on the same definition.
Changing volume of trade
across borders- ‘Markets and
production in different
countries are becoming
increasingly interdependent
due to the dynamics of trade in
goods and services and then
flows of capital and
technology’ (OECD)
The nature of goods across borders –
more intermediate goods cross borders
due to outsourcing (Ronald Jones)
The movement of the
factors of production
from one economy to
another (Richard
Rosecrance)
The flow of international
capital and integrated financial
markets (Louis Pauly)
Globalisation of capital
compared with trade is noted as
the recent distinguishing mark –
and the reason for greater
corporate wealth, higher
unemployment and decline in
working standards and
environmental standards
Figure 4.17. (a) Different views of globalisation.
86 CHAPTER 4. GLOBALISATION, DEVELOPMENT, AND TECHNOLOGY
High levels of cross-border flows –
labour migration, trade,
communication – (Ankie Hoogvelt)
The process of increasing
international economic
activities – measured by
‘increasing liberalization of
international trade for goods
and services and of
international capital
movement while cross
border labour movement is
still strictly restricted’ (Chen,
Hule, Stocker).
A state of mind
(Kofman and
Youngs)
Technological
changes and
changing spatial
relations (Sassen)
Decreasing the importance of
distance – ‘Advances in technology
affecting production and
dissemination of cultural products
are at the root of cultural
globalization. Homogenisation is
happening – a virtual annihilation of
space through time (Giddens,
Changing role of nation
state – The world becoming
larger in some senses and
smaller in others (Teune
and Mlinar)
Figure 4.18. (b) Different views of globalisation.
4.5. GLOBAL VIEWS OF GLOBALISATION 87
Globalisation as progress of markets
Opening up a country to international
competition gives it the opportunity of
political and economic benefits. But
there are concerns about state versus
private sector control. How much
control should there be for
corporations? How much do they
realize their responsibility in the care of
a society?
Globalisation as creative destruction
Capital must not only have open
exchange with noncapitalist societies
or only appropriate their wealth; it must
also actually transform them into
capitalist societies themselves.
Globalisation as co-operation and
interdepedence; institutionalism
States can interact and benefit mutually
through globalisation
Globalisation and Democracy
An increasing number of decisions are
made through intergovernmental
organizations such as the World Trade
Organisation or the European Union
and are not democratically decided.
Globalisation and a green perspective
The green view reflects concerns about
global acts which affect local issues.
They concern themselves not only with
environmental issues but workers rights
Figure 4.19. Lenses with which to view globalisation.
88 CHAPTER 4. GLOBALISATION, DEVELOPMENT, AND TECHNOLOGY
Naomi Klein is well known in Canada as a journalist and activist who works with an antiglobalisation movement. Actors in this movement are not suggesting that there shouldn’t be any
trade taking place across borders, nor that we should be nationalistic; both of these are common
misconceptions. Imagine you live in England. Two different people might recommend you avoid
buying a jacket made in China but that you buy one ‘made in England.’ One person might mean that
they don’t agree with the conditions under which workers in that particular clothing company work
in China. The other may simply want to build England’s economy for selfish nationalistic reasons.
Others might want to support local small businesses. Globalisation to those who fight it is explicitly
neo-liberal with the aim of developing Western market superiority above and beyond all else.
Challenge Box: Watch the video ‘Life and Debt’ by
Stephanie Black and consider the position of the film makers.
Compare this with your own and that of your parents.
4.6 GLOBAL ECONOMIC ISSUES
Reader (2007) points out that you could be forgiven for assuming that the market system which exists
today has always been present. Some say that competitiveness is in our human nature. However, if
we start to look back only a few years we can see some major changes to what is called ‘The New
Economy.’ This has emerged with three distinct features (Fig. 4.20).
Companies operating in this new environment have a number of strategies to survive
(Fig. 4.21).
Work in the New Economy
Sennett (page 12, Reader, 2007) believes that the shift from managerial to shareholder power has
changed the dynamics of companies.The driving force becomes one of profit – there is no real interest
or concern for the individual company. Senett calls this ‘impatient capital’ – where companies are
under pressure to present themselves in the best possible (profitable) light – appearing to be dynamic
and flexible – also centralising management structures and focusing control at higher levels.This has
led to more IT and replacement of some workers with computers. We also see a loss of craftsmanship
and security.
4.6. GLOBAL ECONOMIC ISSUES 89
Global – capital, labour, technology, markets
Networked
Productivity and competitiveness depend upon
capacity to generate process and apply knowledgebased information.
Figure 4.20. Three features of the new economy (Reader, 2007).
1. Downsize the firm Í´ keeping the
indispensable highly skilled labour force in
the North while importing inputs from low
cost areas
2. Subcontract part of the work to
transnational establishments and to
auxiliary networks whose production can
still be internalized through the network
enterprise
3. Use temporary labour, part time workers
4. Automate or relocate tasks
5. Obtain labour force agreement to more
stringent conditions of work and pay as a
condition for the continuation of jobs
Figure 4.21. Strategies for survival in the new economy (Reader, 2007).
90 CHAPTER 4. GLOBALISATION, DEVELOPMENT, AND TECHNOLOGY
Figure 4.22. Impatient capital.
4.6. GLOBAL ECONOMIC ISSUES 91
Competition
In 2004 (Reader, page 17), during the course of only 3 months, 58 US companies, 55 European
companies and 33 from other Asian companies planned to move to China. 400,000 jobs moved to
other countries. Globalisation is sometimes used as an excuse to concentrate power within fewer
businesses on the grounds that this is the only way to remain competitive (e.g., US with China) as
only larger companies can survive etc. Large corporations become predatory giants – mergers and
buyouts abound.
Figure 4.23. Competing to survive.
The Economics of Development
The Pearson Report, 1969, was the first major report to consider under-developed countries although
it is maligned by many as neo- colonialist as it ignored women, viewed poverty largely in terms of
employment and simplified the idea of technology transfer. The Pearson report did recognize the
problem of urbanization and malnutrition but saw solutions largely in terms of increased investment
in jobs. Since then many seminal studies have been made (Smillie, 1991). In 1990, the World Bank
World Development report devoted itself to poverty. Despite the intentions of these organisations
initially, it was clear that the number of poor had increased in both real and relative terms. IMF
and World Bank structural adjustment loans were intended to reduce the impact of the external
92 CHAPTER 4. GLOBALISATION, DEVELOPMENT, AND TECHNOLOGY
‘Adjustment then runs the danger of
becoming not a one time economic
housecleaning but the continuation of a
long downward spiral of belt- tightening in
the face of intractable Northern trade
policies.’ Smillie, p15, 1991
Figure 4.24. Smillie.
shocks by promoting more durable economic structures and sustained economic growth. Currency
devaluation, reductions in government spending were enforced upon countries and trade and exchange liberalization, industrialization and diversification into the export of manufactured goods
encouraged. However, it was assumed that there would be good access to external markets and for
this to happen trade liberalization and reduction of tariffs and quotas by industrialised countries
were critical elements. Smillie tells us that it was this element and not the conditions imposed on
developing countries – that met with failure.
Smillie uses cotton as his good example. A natural evolution of cotton would be diversification into textiles as happened in the Industrial Revolution. Northern countries, however, invented a
mechanism that worked against this Southern growth industry. Known as the Multi-Fibre Arrangement (MFA), it works directly against the WTO principle of non-discriminatory trade liberalization
by restricting Southern textile imports into the North. ‘It is estimated that the gain to developing
countries of the removal of quotas and tariffs under the MFA would have been 11.3 billion, roughly
one third of all official development assistance from all OECD countries in 1987. In Bangladesh,
700 export clothing factories had developed by 1985, and in the year that followed, US, Canada,
Britain and France imposed quotas which resulted in closure of 500 factories’(page 14).
Smillie goes on to explain that conventional economic theory of development since the Second World War has been dominated by the concept of growth. ‘It posits that there is a stage in a
4.6. GLOBAL ECONOMIC ISSUES 93
country’s history during which the required conditions for sustained and fairly rapid growth must be
consolidated, following which such growth is more or less assured’ (Smillie, page 34). Growth rates
depend upon the amount of capital investment in infrastructure and industry. The idea is that more
investment in more productive sectors will create higher growth and speed in the development process. However, we also know that ‘growth must also be accompanied by poverty alleviation schemes’
…yet ‘most emphasis in development spending is on growth…Northern commercial bank lending disappeared in the 1980s and structural adjustment lending and IMF stabilization programmes
became conditional on opening economies to more rather than fewer competitive forces’ (Smillie,
page 34).
Challenge Box: Try talking to your friends about economic
growth. Note the assumptions that are made. Many of us
think within the ‘hegemony’ (ways of thinking of the dominant system or class) that a market driven capitalist economic
system is the only feasible way to progress. In fact, we have
only been thinking like this for a relatively short period of
time.
94 CHAPTER 4. GLOBALISATION, DEVELOPMENT, AND TECHNOLOGY
‘In its initial conception, the IMF was based on a recognition that markets often did not
work well – that they could result in massive unemployment and might fail to make
needed funds available to countries to help them restore their economies. The IMF was
founded on the belief that there was a need for collective action at the global level for
political stability. The IMF is a public institution established with money provided by
taxpayers around the world. This is important to remember because it does not report
directly to either the citizens who finance it or those whose lives it affects. Rather it
reports to the ministries of finance and the central banks of the governments of the
world.’ However, ‘ the IMF has changed markedly. Founded on the belief that markets
often worked badly, it now champions market supremacy with ideological fervour… In
many cases, the Washington Consensus policies, even if they had been appropriate in
Latin America, were ill-suited for countries in the early stages of development or
transition. Most of the advanced industrial countries – including the United States and
Japan – had built up their economies by widely and selectively protecting some of their
industries until they were strong enough to compete with foreign companies. ..Forcing
a developing country to open itself up to imported products that would compete with
those produced by certain of its industries.. can have disastrous consequences – socially
and economically. Jobs have systematically been destroyed – poor farmers in
developing countries simply couldn’t compete with the highly subsidized goods from
Europe and America – before the countries’ industrial and agricultural sectors were
able to grow strong and create new jobs. Even worse, the IMF’s insistence on
developing countries maintaining tight monetary policies has led to interest rates that
would make job creation impossible even in the best of circumstances. And because
trade liberalization occurred before safety nets were put into place, those who lost their
jobs were forced into poverty.’ (Stiglitz, p17)
Figure 4.25. Stiglitz.
4.6. GLOBAL ECONOMIC ISSUES 95
Engineering and Globalisation
According to many, engineering is one of the main driving forces of development and thereby globalisation. ‘Because technology is such an important part of the growth process, aid can be of invaluable
assistance in the transfer of technology from the North to the South.’ However, Brawley expresses
the following affects of technology which demonstrate the profound ways in which technology can
impose changes to the culture of a civilisation:
Altering Public Consciousness
‘advances in technology affecting
the production and dissemination of
cultural products are at the root of
most arguments about cultural
globalization.’ (Brawley, p28). He
suggests that ‘the culture being
spread around the globe is
generated by corporate products
and corporate decisions’ and he
quotes Benjamin Barber ‘a culture
of advertising, software, Hollywood
movies, MTV, theme parks and
shopping malls hooped together by
the virtual nexus of the information
superhighway closes down free
spaces, such a culture is
unquestionably in the process of
forging a global something: but
whatever it is, that something is not
democratic’ (p29).
Figure 4.26. The new world of theme parks and Hollywood.
96 CHAPTER 4. GLOBALISATION, DEVELOPMENT, AND TECHNOLOGY
Altering the Costs of Choices
Manufacturing and efficient
production methods speeds up
processes and changes labour
forces.
Digitization affects the transfer of
cultural goods such as music
and film.
Advances in technology reduce
transportation costs which
affects speed of delivery and
which goods may be transported
Figure 4.27. A digital world.
4.7. FINAL THOUGHTS 97
4.7 FINAL THOUGHTS
There are many ways in which engineering affects globalisation,and we have already considered some
of these. As with our discussion of development above, it is clearly possible to say that engineers are
no worse than anyone else, so why pick on them? This would be to miss the point. If you believe
that we all have a responsibility to make life less intolerable for the most vulnerable populations in
any country, then all professions should have education books which help their students learn about
the implications and contributions that their profession is making.
Challenge Box: What questions remain after reading this
chapter? Write them down and keep them somewhere until
they crop up again. Note how your thinking changes over
time.

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