Competing Globally

Technology Makes International Trade Possible for Developing Countries

October 1, 2007

By Pam McLaren

Throughout the ages, merchants looked for trade routes and hired ships or pack animals to get their merchandise to customers.

Today, sales can be conducted through something as simple as a cell phone.

“If you have Internet access, you can put your business online and compete with top companies throughout the world,” said Joe Greco, director of Cal State Fullerton’s Center for the Study of Emerging Markets. “Technology, such as cell phones, computers, etc., has leapfrogged the development process that the United States and the United Kingdom went through.”

Greco and other business faculty are helping students discover the global marketplace by showcasing the developing countries that are taking advantage of technology to increase their economic growth and power. Places like China, Brazil, Central Europe and India.

Asia, the European Union and NAFTA countries used to be the trade triangle, said Greco. Now, “there is tremendous growth outside the triangle — with technology,” he added.

“There are lots of good things happening in these countries,” agreed Dipankar Purkayastha, professor of economics, noting that growth rates of 7 and 8 percent are being seen in areas such as China and India. International corporations are expanding. In turn, they are looking at the world — not just the country or continent where they are located — as their market.

“Corporations are reaching out to those areas that want their products,” said Greco. “It used to be American businesses told other countries what they would like. Now we know and other business leaders are focusing on the needs of potential audiences and responding to their concerns and desires.”

While Asian countries fare well in the way of exports, other countries, such as those in Africa, continue to struggle to develop a market economy. One concern addressed by both Purkayastha and Greco is the poor quality of the physical infrastructure in Africa. Businesses have to be able to get their products to their customers.

“If you want to be a player in the world market, you need to be able to assure your customers that you can keep the quality constant and can produce volume,” added Greco.         

Recently, quality has become an issue for one of the biggest importers to the United States. In the last couple of months, several products imported from China —ranging from toothpaste to toys — have been recalled because of the hazards that they may pose to consumers.

“Unlike the United States, China is not truly a free-market economy. They still have a central government, one that can send down word to not have further additional recall issues on their hands,” said Greco.

“So, Chinese suppliers, who increasingly enter into larger and larger contracts to manufacture product, are being held to standards involving a constant, if not higher, level of quality.

“I’m very optimistic about what is happening in international trade,” said Greco. “More and more opportunities, such as the Middle East, are out there for more and more companies.”