The Information Revolution & The Rise of the Global Economy

Instructor: Brett Bjornsrud
This lesson will focus on how the information revolution's technological advances allow businesses around the world to work together. Examine how and why this has led to big changes in the global economy.

Why is This Called a Revolution?

The United States of America has undergone many 'revolutions' as new ideas change the way businesses and society operate. One of the most well-known is the industrial revolution, which occurred in the 1700-1800s, when major advances in machinery powered by water, steam and coal led to increased productivity and output in manufacturing. Factories arose and new procedures allowed for business to boom across the country. This affected the global economy, and goods ended up being shipped all over the world; however, it was a slow process.

Within the last fifty years or so, America has entered into an information revolution. Particularly with the creation of the Internet in the last few decades, it has become easier than ever for businesses around the world to share knowledge, leading to a significant global economic impact. Technology has allowed production to no longer be slowed by oceans or mountains, and the speed with which ideas and money can travel is nearly instantaneous.

Business without Borders

Every morning Paul checks email at his desk in Cleveland, Ohio. He is waiting on critical information from a design team in France that has entered into a partnership with his company for re-designing their laptops. Paul needs schematics from them urgently as the manufacturers in China are ready to begin production as soon as it has been approved. This is a big deal, especially because Paul's is a small company that's finally marshaled the resources to expand and compete against larger multi-national corporations.

The Speed of Information

Paul's company can benefit from business partnerships like this in many ways. Data and knowledge can be shared nearly instantly, allowing for participation among companies all over the globe in ways like never before. What would have taken days (or longer!) to get to another country just a few years ago now takes only seconds.

All branches of Paul's company can access and share sales and marketing data to plan ahead for amounts of materials needed, reducing excess inventory and saving costs. Depending on sales data, production can be increased or decreased immediately, all while updating the logistics that will be impacted by these decisions as well. Funds can be sent to and from financial institutions within seconds to ensure that production is not impeded. This capital is necessary for the purchase of goods, wages for employees, production costs, shipping and many other aspects of operations, and even a slight delay could result in financial loss.

The Spread of Information

Humankind has seen many great inventions, innovations and discoveries. The information revolution is about sharing these developments in a way that has never been done before. Using the Internet, students in developing countries have the ability to learn skills that lead to employment at multinational corporations like Paul's. These same companies that may be able to produce goods cheaper and more efficiently now conduct training via teleconferencing, with users working together virtually to share skills even though they are thousands of miles apart

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