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INTRODUCTION
Two of the most fundamental technological influences that have shaped the global economy are information technology and transportation technology. Both of these technologies have merged to create the most efficient means of global trade ever seen. The ability of a company to supply inventory, manufacture, track, ship, and distribute products to a fulfillment center or retail location is enabled by both information and transportation technologies. In turn, this efficient system of supply chain and logistics creates high levels of global competition.
Friedman (2005) described the circumstances well. In the early 1990s, when engineers designed software that would generate documents easily accessed across the Internet, they basically gave rise to the World Wide Web. Simultaneously, the first web browser was written to accommodate the new format. There was also a proliferation of ready-to-use software. As worldwide Internet bandwidth also increased and became more affordable, user-friendly computers hit the market, and millions of people were sharing information across the globe at a rate that had never before been seen.
In 1994, the North American Free Trade Agreement took effect, reducing tariffs on goods imported to the United States from Mexico and Canada (United States Department of Agriculture, 2011). Suddenly, unskilled workers in the United States worried about their manufacturing jobs moving to Mexico where wages were, and still are, much lower. In fact, many unskilled manufacturing jobs have since been moved to countries where wages are much lower. This happens because of increased competition among manufacturers. For example, if a manufacturer in Mexico can produce socks for much less than a manufacturer in the United States and import those socks into the United States with no taxes added to the price, then consumers are likely to buy the Mexican socks. The American manufacturer cannot cut wages so low that its workers cannot earn a living, so American socks sell at a noticeably higher price. The American manufacturer cannot compete and is forced to move labor-intensive portions of its operations to Mexico.
Now, similar trade agreements are in place among countries around the world. Manufacturers in highly developed countries like the United States and those in the European Union have moved their low-skilled operations to low-wage countries around the world. Even high-tech companies that have developed significant...