The Internet and its Likely Impact upon Society, Business and the Economy

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Web 2.0 and Socialization

Previously individuals were limited to meeting others by chance and physical proximity, e.g. co-workers, neighbors etc. The Internet enables people to contact others with similar interests from anywhere in the world and to engage in ongoing asynchronous and synchronous communications with them. Such communications may build friendships, romance or business partnerships.

The social potential of the Web has taken off with the growth of the so-called Web 2.0. Web 2.0 sites are created and driven by their users. They begin with a concept and relatively empty framework that is populated by user-provided content.

Globalization

Globalization has been defined as "the process of denationalization of markets, politics and legal systems, i.e., the rise of the so-called global economy." [Globalization.com]. The trend towards globalization hastened during the latter part of the 20th century and may be viewed in parallel with the rise of the multinational corporation.

Multinational corporations are large corporations which operate across a number of countries. The United Nations Research Institute for Social Development (UNIRSD) report "Visible Hands: Taking Responsibility for Social Development" states that "In 1998 the top five corporations had annual revenues that were more than double the total GDP of the 100 poorest countries."

Multinational corporations generally organize their operations and finance so as to maximize profit, e.g. moving operations to regions offering the cheapest labor costs while managing finance so as to minimize taxation liability. Recent years have seen violent mass demonstrations against globalization in Seattle, London, Genoa, Washington etc. Critics of globalization believe the trend exploits workers in the poorest countries, fuels job losses locally and encourages unethical practices from the multinational corporations. Globalization is also cited as a threat to democracy given the economic strength of major multinationals which are accountable only to their shareholders, are often beyond the control of any national government and are driven by the fundamental goal of profit maximization.

Information Technology advancements are likely to intensify the trend towards globalization eg a growing number of call center jobs are being relocated to India. It is not the purpose of this paper to argue the pros and cons of globalization, merely to comment that it represents an irresistible force in that firms which choose to operate in inefficient ways will be replaced by those that take advantage of the global economy. In the best case scenario globalization will see a reduction in inequality by encouraging the flow of investment from the rich to the poor. The challenge for the world is to ensure that the information age really does bring about the greater good.

The growth of the Internet must be considered an integral part of increasing globalization, both as an enabling and driving force, and as an inevitable consequence of that trend. Technology makes it easier than ever to globally outsource an increasing variety of information processing and production work to those able to provide greatest value for money. Governmental attempts to obstruct this process will result only in uncompetitiveness and loss of inward investment.

1999 saw the launch of the single European currency (euro). Since that time there has been much debate as to whether and when the UK should join. It is likely that the global impact of technological developments will soon render the question irrelevant. Bloor predicts that "ultimately, there is room only for a single world currency.... If there is any attempt to impose more than one, then the more stable currency will drive out the less stable. A national currency will come to be seen as a tax on international transactions and where tax can be avoided, it will." Where economic integration occurs, so political integration is likely to follow.

The concept of nation state is one that is so ingrained within our psyche that its status as a human invention rather than the natural state of affairs is rarely questioned. Increasing globalization combined with increasing access and use of new technologies are already diminishing the role of the nation state. The Internet, like the multinational corporation, operates frictionlessly across national boundaries relatively unhindered by the currently prevailing laws of individual countries. Any attempt to regulate either requires cooperation on a worldwide scale, something which dictates a radically different and lessened concept of nationhood. Obviously, something as integral to human identity as the nation state will not disappear overnight, but it would be unsurprising if the concept remained only as a historical relic at the beginning of the 22nd Century.

All information correct and links valid at time of writing, September 2008.