The New Technology Vs Global Inequality


Technology can be conceptualized as an applied science. It is the application of scientific principles for practical use. Technology presents nations and individuals with an opportunity for industrial growth and leadership in the industrial economy. It has contributed to a network society in which power is shifting from national states to global networks resulting into a slow reduction in the influence of individual states. This has been made possible because of the ICT impact in the information age.

With this age, the economic growth stems from the generation of new knowledge as the key source of productivity. There is however a debate on whether the new technology has increased or narrowed down the global inequalities. One group of scholars argues that technology is responsible for the global economic inequality. Still another group has maintained that the same technology has provided the means for innovation diffusion and network dissent to deal with those inequalities. This paper will evaluate the two claims.

New Technology and Increased Global Inequalities

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Whether technology is responsible for inequality or not is debatable. There has been an argument that unequal rate of technological growth and the digitalized divide are solely responsible for the global inequality. That the rate of technological growth and the digitalized devide in the developing countries is far much below that in developed countries. These are potential causes of inequality between the national income. The scholars who oppose this claim argue that technological change when linked with greater economic integration of trade and investment, offer opportunities for some countries to catch up. They have given examples such as the four Asian tigers. The debate is even more complicated as other studies have revealed that between countries reductions in inequality can coexist with increases in within countries inequality.

The argument that technology has brought about inequality stems from the fact that different nations have experienced different levels of technological growth. Since the onset of the industrial revolution during the 18th century, technological changes have been intimately related to economic growth and industrial leadership. Studies have shown that each of the major industrial growth in the industrialized world was linked to technological growth.

During the onset of industrial revolution, technological advancements enabled Britain to emerge as a world leader in manufacturing. This was because of its innovations in machinery and mechanization of textile production. This proves the fact that technology provides nations with opportunities to increase their economic growth and achieve positions of industrial leadership. For some time Britain enjoyed the leadership over other nations including USA and Germany.

During the same time technology allowed the opening up of the sea routes improving the Britain’s infrastructural link with other countries. This made it possible for the diffusion of the technology to both Germany and the USA. The proper utilization of the technology enabled the two countries to forge a head of Britain in the late 19th Century and the early 20th century. They were able to adopt the new railways relatively earlier and utilized the resulting large domestic markets to imitate British industrial achievements.

This is an indication that, even though technology presents nations with opportunities to grow, the disparity in the technological skills and knowledge has a role to play. Another factor that was evidenced is the availability of capital which also varies between nations. Germany, for example, invested heavily in railways transport leading to the rise of new financial institutions and forms of corporate finance. This enabled its firms to easily raise the capital needed for investment in new technologies.

The inequality can also be explained using the technology-push model of innovation. According to the model, countries level of growth of the scientific and technological knowledge determines its level of innovation and therefore that of economic growth. This means that every country must carry out more of R&D to increases its pool of scientific knowledge. The knowledge is very basic in any innovation process and therefore to the process of economic growth. This is another cause of inequality. The poor nations have since the onset of the information age struggled in their allocation of funds to R&D. In contrary to this, countries like Germany began to set up its own R&D departments earlier enabling them to experience major economic growths.

It is also important to note that the industrialized countries’ population have already possessed the knowledge and skills needed to support the development of new technology. In contrast, the developing countries have had to spend more time to accumulate stocks of these capabilities before they benefit from any of such new technology.

However, the case of Japan and The Asian Tigers is an indication of how technology can be utilized to reduce the inequality among nations. Technology enabled these nations to catch up by exporting the ICT based products during the period between 1970’s and the 1980’s. These countries were able to strategically use trade and protection to acquire specialization in new technologies. This resulted into considerable economies of scale and of scope. It is therefore without doubt that there are many opportunities for developing countries arising from new technologies. However, the method of transfer of this technology must be analyzed with much precaution. The usually used linear model takes the form of a project. This makes the technology to be transferred to be often developed in a US and European context and therefore not fully suited to the individual needs of the developing countries.

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Measurement of global inequality

One of the difficulties experienced in analyzing the global inequality is in measuring it. This is because the concept is understood and described in different ways by different experts and leaders. Questions have also been asked on whether to interview individual citizens or households. Some scholars have proposed the use of the average per capita income for nations or the GDP. Some have also argued that these averages depend on market rates which are easily influenced by such factors as expectations and speculations. Such measures may therefore not reflect the real economic situation in a country in terms of actual economic welfare of its inhabitants.

 However, once the distribution of income of all the countries in the world has been obtained, the Theil index can be used to determine the extent of global inequality. The method is preferable because it allows us to measure global inequality as a function of inequality between countries and inequalities within countries.

The Theil index for global inequality is the sum of the Theil index for the inequalities between countries added to a weighted sum of the Theil indices for the inequalities within countries, where the weights are proportional to each country share of global income. The Theil index shown in table one is a clear illustration of the disparity that occur both among and between different nations. It reveals that the Theil index for the developed countries was larger than that of the other groups with that of Africa and East Asia remaining negative for the entire period. This was because the ratio between income and population share of the developed countries was higher than that of the other groups.

The ratio for both the East Asia and African remained negative revealing that their income share is lower than their population share. This meant that much of the wealth was with the developed countries pointing to inequality. Overall, the Theil index for the developed countries experienced a significant increase especially during the period of1960s to 1980s’. During the same period the Theil index of the poor countries like those in African either remained constant or decreased. This is an indication that there was a shift of wealth to the rich nations. However, it is evidenced that there was a significant increase crease in the East Asia especially between 1980 and 2000. This would have been attributed to the economic growth that was experienced by the Asian Tigers.

Technology as a Means Eradicating Inequality

There are two major ways in which ICT has contributed to the reduction in inequality among different nations. First is by providing a channel for the diffusion of innovations and second is by supporting the work of various dissent groups through networking.

Through its role in globalization, ICT has led to the rise of international order. The innovations of the information age are not confined to national boundaries. Technological advancements have led to increased regional integration in the world market as the barriers to trade and investment fell. This has provided an important factor in the stimulation of mass production in various countries leading to their growth. The degree of technology transfer has been associated with openness to trade and capital flows.

ICTs also to an extent control the functioning of Transnational Corporations (TNCs) in the form of networks. These developments have the potential of assisting in the transfer of technologies to developing countries as they are progressively integrated into the wider global economy. Such moves will without doubt have a profound impact on global inequalities. ICT-aided integration investment is bringing the world together and may reduce global inequality. It has provided networks which stimulates the organization while integrating the flow of trade and investment in the world economy. ICT has also led to the establishment of such concepts like network enterprise which are emerging as new forms of organization in the economy.

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Role of Technology in Networking Dissents

Some scholars have argued that technology has enhanced the networking between dissents and empowered them to change inequality. Such networks seek to challenge various nations attempt to order the international systems. The dissents also allow actors to create political communities whose functions and influence are never limited to any given states. Their networks many at times campaign against the status quo. Till today, their influence are witnessed in various nations as they organize such actions as street demonstrations to challenge any action that they perceive as a potential cause or form of inequality.

The networks of dissent focus on identifying any form of disparity and expressing their discontent while trying to influence the government of the international system to act. Information and technology have enabled dissent to operate beyond the states’ boundaries. They question the transparency in every frame of conduct guiding the international relations. The ICT networks have helped in linking various groups of civil society. It is therefore right to say that ICT is thus a potential agent of transformation and reduction of inequality.


In conclusion, it is clear that technology is both a cause and a solution to global disparity. It provides more growth opportunities to the developed countries than to the developing nations. As demonstrated it aids various networks to successfully influence the actions of states and other powerful global institutions. They can challenge their hegemony and transform the international system in favor of the marginalized nations and individuals.

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