Technology, Globalization And Intellectual Capital September 30, 2007 |  Ayorinde Oduroye (Archives)

Technology can be defined as the application of the study of nature to solve problems confronting mankind.  It can also be seen as the technical means people use to improve their surroundings. (www.bergen.org/technology/defin.html).

            The Computer Desktop Encylopedia defines technology as a “systematic technique, method or approach to solve a problem.”  Technology is a discipline dealing with the art or science of applying scientific knowledge to practical problems in commerce or industry.  (Answer.com). There are various types of technologies available such as the ones for domestic productions in agriculture and rural development, energy and environment, health, food security, biotechnology, industrial manufacturing, those for information and communications technologies (ICT), and space exploration.

            According to the National Policy on Science and Technology, three major technologies will pose challenges and opportunities to Nigerians in the first half of the 21^st Century, these are:

·        Information and Communications Technology (ICT)

·        Biotechnology and Bio-resources Research and Development

·        Engineering Materials.

Information and Communications Technology is considered to be the bedrock for national survival and development in a rapidly changing global environment.

      Genetic engineering will be the focus in biotechnology in order to make life sciences an engine of growth and business for the country.

 

 

Globalization

      Information Technology has made the world to be a global village.  This has made a worldwide impact on economic, politics, medicine, commerce and trade.

      Globalization can be seen as a worldwide phenomenon of technological, economic, political and cultural exchanges brought about by modern communications, transportation and legal infrastructures.  In other words, it is a term used to describe how human beings are becoming more intertwined with each other around the world economically, politically and culturally.

      Many considerations had been given to the issue of globalization and therefore we have different definitions from various angles.

      The International Monetary Fund (IMF) defines globalization as ”the growing economic interdependence of countries worldwide through increasing volume and variety of cross-border transactions in goods and services, freer international capital flows and more rapid and widespread diffusion of technology” (IMF, World Economic Outlook, May, 1997).

      The World Bank defines globalization as the “Freedom and ability of individuals and firms to initiate voluntary economic transactions with residents of other countries.”

      From all the various definitions available, it is clear that globalization has economic, political, cultural and technological aspects that may be closely intertwined.

      The economic aspects stressed in globalization are trade, investment and migration.  The globalization of trade entails that human beings have greater access to a plethora of goods and services that have never been seen in human history.

      The globalization of investment takes place through Foreign Direct Investment, where multinational companies directly invest assets in a foreign country, or by indirect investment where individuals and institutions purchase and sell financial assets of other countries.

      The political aspects of globalization are evidenced when governments create international rules and institutions to deal with issues such as trade, human rights, and environment.  Some of the fruits of globalization are the World Trade Organization, the Euro Currency, the North American Free Trade Agreement and many more.

      Cultural global ties also grow through globalization as new ideas and fashions through trade, travel and media move around the globe at lighting speed.  Global brands such as Coca-Cola, Sony and the like serve as common reference to consumers all over the world.  For example, an individual in China enjoys the same soft-drink as an individual in Puerto Rico at the opposite ends of the globe.

      The other aspect of globalization is the revolutionary changes in technology, particularly in transport and communications, which has made the world a global village.  For example, in 1850, it took nearly a year to sail around the world, but the story has changed, today, one can fly round the world in a day, send an email anywhere almost instantly, or be part of the billion viewers watching the final match of the World Cup.  Transportation costs have come down as a result of technological advances that make foreign markets more accessible to trade.  Through the electronic means, billions of dollars in assets and currencies are exchanged daily around the globe.

      Globalization is good but it also has its own disadvantages, such as economic, political and environmental insecurity

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Intellectual Capital

      According to the Oxford Dictionary, intellectual refers to “power of reasoning” and intellectual property refers to “property such as an idea, a design, etc that has been created or invented by somebody but does not exist in a physical form”.

      In economics term Capital can be seen as wealth or property that can be used to produce more wealth, while capital asset is “all the wealth owned by a person or a business.

      Judging from the above definitions, capital in its traditional form could be viewed in purely financial or physical terms while other intangible capitals or assets like copyright, knowledge etc could be termed Intellectual Capital.

      Intellectual Capital can be broken down into three areas which are Human Capital, Customer Capital and Structural Capital.

      Human Capital is the knowledge that resides in the heads of employees that is relevant to the purpose of the organization.  It is formed and deployed, when more of the time and talents of the people who work in a company is devoted to activities that result in innovation.

      Human Capital can grow when the organization uses more of what people know; and when people know more stuff that is useful to the organization.  It is of interest to know that in the knowledge society, organizations need knowledge workers far more than knowledge workers need them.

 

Customer Capital

      This represents the value of a company’s ongoing relationships with the people or organizations to which it sells.  The benefit of a well managed customer capital is market share; customer capital is market share, customer retention and defection rates, and profit per customer.

 

Structural Capital

      Structural Capital is the knowledge retained within the organization that becomes company property.  It belongs to the organization as a while and can be reproduced and shared.  It includes technologies, inventions, publications, and business processes.

      Intellectual Capital can be used to improve competitive advantage.  Intellectual Capital is the information stored in our brain.

      Finally, it should be noted that Intellectual Capital have legs, therefore, once a company identifies its intellectual Capital, the next step is to maintain it.

      The big question is how does a company maintain its intellectual capital?  There have been many postulations about this, but according to Andrew Scott, vice president of IT at AeroGroup International Inc., Edison, N. J., the best way is to keep employees happy.

      It could also be managed by capturing knowledge in expert systems and quantifying its value to the company.  Another way is to have employees sign confidentiality agreements, which helps prevent trade secrets from walking out the door when employees do.

      Above all, it should be known that human beings cannot be replaced with a computer so be nice to them. 

      Technology, Globalization and Intellectual Capital are exclusive concepts that need one another to be effective especially in this electronic age.

 

 

References

www.bergen.org/technology/defin.html

Computer Desktop Encyclopedia

Http://en.wikipedia.org/wiki/Globalization

www.Answer.com

IMF, World Economic Outlook, May, 1997