Globalization and national diversity: E-commerce diffusion and impacts across nations

In recent years globalization has become the subject of fervent debate, intensified by the spread of low-cost information and communications technologies (ICTs), particularly the Internet. On the one hand, crossborder flows of capital, labor, and information may be leading to convergence in how economic activities are organized, reducing the role of the state and its ability to control and guide its own economic development. There are fears that globalization is causing serious economic dislocation as competition intensifies and trade imbalances grow. On the other hand, culture, history, regulation, and other local factors may limit economic convergence, preserving national differences and creating unique capabilities and comparative advantages. The spread of low-cost ICTs, particularly the Internet, accelerates the convergence process by facilitating cross-border information flows and coordination of economic activities. Excitement about the Internet’s potential for improving quality of life and bolstering overall economic health is, however, tempered by concern over its potential for worsening the perceived threats of globalization. The United States has played a key role in developing Internet technologies and applying them to create new models of e-commerce – uses of the Internet for business activities such as buying, selling, and providing support for products and services in the firm’s value chain. US firms have been supported in these efforts by favorable government policies, a largely deregulated telecommunications market, a dynamic venture capital market, and positive attitudes toward information technology. US companies have used the Internet to create new businesses, transform old ones, and coordinate global production networks.