Impact of Technology on Trade
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Published: Mon, 20 Aug 2018
Technology plays a crucial role in the development of countries. It is very important both for developed countries and developing countries as technology progress will enable countries to be more competitive in the global market. Thus progress in technology helps countries to develop the economy and strengthens their trading positions in the competitive global market (Sabir, 2010). With the development of technology, high-tech products will become the major players in international trade. The traditional primary products and ordinary manufacturing goods will account for less in the international trade business than before. In order to illustrate the impact of technology on trade and development for the country, this essay will take South Korea, a developed country and the Samsung products as example to analyze the way the technology influences the country’s development and its trade.
Technology development in South Korea
The development of technology can decide the future of the country in terms of its economy growth and its position in the international community. South Korea, as all we know, is a lively example in the technology research and development. Forty years ago, South Korea was still a laggard agricultural country and was empty in science & technology fields. However, during 40 years’ endeavor, South Korea has made outstanding performance and achievements in the technology development. Its innovation capability is improved a lot and the distance to developed countries regarding the technology aspect is becoming closer. Since 1970s and 1980s, the science & technology policies of South Korea have been gradually shifted from introduction & imitation model to self-development and innovation (Viotti, 2002). Therefore, since then, high-tech projects, such as sophisticated electronics, new materials, semiconductors, precision chemistry etc. have been developed rapidly in South Korea. That Semi-conductors enterprises, such as Samsung, can successfully compete in the international semiconductor market can not separate from the independent technological innovation. Thanks to the technology progress, South Korea has made great development in economy. As we know, economy and technology are two essentials which can not be separated from each other for the country. The progress of technology will promote the development of the country’s economy, meanwhile, economy growth will enable the country more capital to the technology research. From the experience of developed countries, their fast development in economy can not be separated from their progress in technology. Technology is becoming the core for the developed countries (Hausmann and Rodrik, 2003).
Impact of technology on trade and economy growth
Economic development of South Korea started in 1950s and achieved a take-off in economy growth in 1960s. In the initial stage, South Korea applied inward economy growth strategy; however, since 1962 the country began to implement an export-oriented economy development strategy. South Korea is severely dependent on the external markets since its internal market is very limited. The country is highly focused on the export business to create foreign exchange and import the scarce resources. With the development in high-technology fields, South Korea has realized to increase the exports of the high-tech products which have successfully contributed to a rapid economic growth for the country. South Korea has achieved a considerable growth in its GNP from 87 USD in 1962 to 10 936 USD in 2001. This is close to the highly-developed countries. Among the exporting volumes, the high-tech products are increasing year by year. In 1988, the high-tech products accounted for 15.97% of the total exporting volume. In 1999, the high-tech products reached to 32.2% (Kwon, 2010). The progress in technology has greatly helped South Korea in achieving good result in the global trade market and resulted in a great growth in GDP and its overall economy.
Samsung Electronic is a typical successful example in the research and development of technology for South Korea or even for the whole Asian countries. Many technological and electronic manufacturers in Asian countries are trying to learning from Samsung Company. Samsung Electronic Company has made great contribution to South Korea’s economic development. Samsung has got its white goods and other products such as mobile phones famous in the global marketplace. In 2000, the export amount of Samsung Electronic has reached to 18.6 billion US dollars which accounted for 11 percent of the total exporting value. In 2004, Samsung has made a breakthrough of 50 billion US dollars of exporting value and accounted for 21% of the total export value in South Korea (Kang and Jin, 2006). The reason why Samsung products can take a great market share in the global trade market is highly dependent on the technology progress. Take Samsung mobile phone as example, with the continuous innovation and progress made in the technological field, Samsung mobile phone is now become one of the leading mobile brands in the world. It has already posed a threat to Nokia and Motorola’s leading positions in the global mobile phone market (Uimonen, 2000). Facing the fierce competition environment in the global mobile phone market, Samsung mobile phone maintains its strategy to position high-end products for the people with certain consuming capability. High-end products need high-technology to support and continuous improvement in the technology innovation to maintain the high price. Therefore, Samsung never stops its technology research and contributes considerable amount of money into new technology research and innovation every year. Besides the mobile phone area, Samsung is also making efforts to expand its other electronic products with high technology, such as TV, LED, refrigerator, and other white goods in the global markets (Bonaglia, Goldstein and Mathews, 2007). Of course, China is its largest trading partner and Samsung products have covered a relatively large market share in China.
In conclusion, technology progress is the major power and source to speed up the development of the social economy for a country. Nowadays, as peace and development are the major theme for the international communities, high-technology is attached great importance in boosting the economy growth for a country. At the same time, under the globalization trend, the development of technology will help the country to be more competitive in the global trade market thus to boost the country’s economy development.
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