"Within one month our revenues had jumped over 50%."

How Does Information Technology Help Businesses


Small businesses or Micro-Multinationals

Today we’re going to cover small businesses, micro-multinationals and how technology plays a huge role in doing business today.

Foreign Policy Magazine recently published a report with an overarching theme  on future trends and how they will play out over the course of the century.  There was one article/trend that I thought should be mentioned, especially since it concerns small business in the global economy. In addition, the author of that article is important to the business community. Hal Varian, the author, is an economist specializing in microeconomics and information economics, but more famously he is one of the guys who helped Google come up with its famous search engine algorithm, and now is the Chief Economist at Google.

Small businesses or micro-multinationals?

Hal Varian’s piece was called Micromultinationals Will Rule The World, in which he goes on to talk about how even small businesses are able to be micro-multinational on a global level and how current technological trends have dramatically changed the global marketplace. While it may seem as if various industries are becoming more and more concentrated, with news of bank consolidation or how few search engines dominate the market place, this is only part of the picture. While many industries may have become more consolidated, they have also become more susceptible to vigorous competition. With the cost of technological communications driven down dramatically, it has made even easier than before to start a small business and to compete on a stronger footing with big businesses. For example, as the article points out, even the smallest company can now afford a communications and computational infrastructure that would have been the envy of a large corporation 15 years ago. If the late 20th century was the age of the multinational company, the early 21st will be the age of the micro- multinational: small companies that operate globally.

Business communication costs are now affordable on almost every level

With the cost of communications continuing to fall down at faster speeds, the technology is getting more and more powerful. The concept of smart phones would have been virtually inconceivable just 7 years ago. Yet, they are now the fastest selling mobile device on the planet, giving even the poorest of people more resources than the President of the US just 20 years ago. This has all been the result of a phenomenon called Moore’s Law. Which essentially states that technology becomes exponentially powerful over time. Small businesses have been a part of this trend as well, with business owners better able to communicate their products and services through various channels like social networking and websites like Youtube. As a result, even the smallest of businesses are able to reach out to the biggest markets with even smallest of resources, let alone big marketing departments. But its not just past or current technologies that have made it more and more easier for small businesses to compete with their much larger and bigger brethren, their are more technologies in the pipeline down the road, that are going to equalize the field even more between the two competitors.

As Hal Varian points out, most of the substantial progress that has taken place, has largely been in the virtual world, meaning we haven’t seen much of a physical impact of most of these advances. However, as Varian goes on to say, this is all about to change. He says that, while industrial robots have been around for decades, hey have always been big and expensive, as a result only large companies could afford them. But advances in information technology have changed all that. It is now possible to make far cheaper robotic devices, which in turn means that physical services provided by robotics will get substantially cheaper.

So essentially for the longest time, state of the art communications technology was in the purview of only the biggest more powerful of companies. However, just as communications technology was made cheap enough for even the most budget-conscious of small businesses; manufacturing technology will also climb down the ladder in terms of cost, giving small businesses another major advantage. Just as the democratizing of communications technology changed the business landscape, the democratizing of manufacturing technology will have just as big an impact on the business affairs of the future.


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Author:Globial International Business Team

The Globial International Business Team researches, analyzes, and reports on all things related to global trade and business.


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