In a globalized world, technology plays an increasingly large role and might even have an effect on established economic patterns.
A great example of this is eBay’s collaboration with the African online marketplace MallforAfrica.com and DHL. After the initial success of the Africa Growth and Opportunity Act (AGOA), a legislation that opened up the American market for products from many African countries, the trade volume has been decreasing over the last years and is currently stagnating.
Since August 2017 African vendors are allowed to sell selected products to the US via eBay. This extends an existing collaboration, as US merchants were able to sell products in Africa in 2016 already. While the two tech-giants provide the sales platforms and take care of payments, DHL is their partner for logistics and handles shipments. The MallforAfrica CEO Chris Folayan is optimistic that the collaboration will boost trade between African countries and America and expects seven figure volumes both from Africa to the US and vice-versa within the next 12 months. Jake Bright is content that this technology enabled partnership, which to a certain extent bypassed governmental trade policy, will help to boost commerce between the US and African countries (Bright, 2017).
Federal Reserve Chair Janet Yellen also acknowledged the effect that technologies might have on economic patterns around the world during a speech at the end of September. As inflation and other economic patterns are not developing as expected by the Fed and other experts, some experts state that effects of technology might be one of the causes leading to those misjudgments. While economic output and employment rates have been rising continuously over the past eight years, neither wages nor prices were affected, as they should have according to traditional economic theory.
Driven by technological advancements prices for many products have stabilized or even dropped as compressed, increasing computing power leads to smartphones equivalent to former supercomputers for a fraction of the costs. Intelligent thermostats are reducing energy costs and electric demand in general while the efficiencies and benefits from large platforms often eliminate the middleman. Platforms such as TaskRabbit or Uber are good examples for this (Karabell, 2017).
Just recently furniture giant IKEA has announced that they want to acquire the former of the two to further expand its digital services (WIRED, 2017).
This is are interesting developments; as they show the impact modern technologies have not only on our daily life but also on a much larger scale.
While it is obvious for each of us that technology influences our daily lives through social media platforms, smartphones, online banking or Netflix, many people do not realize that technology might change economic theory and the way markets work. As the first article illustrated, online platforms might help to avoid the recent trend towards more protective economic politics and foster growth all around the world.
Bright, J. (2017). Online shopping may have just changed the rules of global trade. World Economic Forum. Retrieved 8 October 2017, from https://www.weforum.org/agenda/2017/10/ebay-mallforafrica-ecommerce-trade-treaties
Karabell, Z. (2017). No Inflation? Technology May Have Left it in the 20th Century. WIRED. Retrieved 8 October 2017, from https://www.wired.com/story/no-inflation-technology-may-have-left-it-back-in-the-20th-century/
WIRED. (2017). IKEA lässt TaskRabbit-User die Möbel zusammenbauen. WIRED. Retrieved 8 October 2017, from https://www.wired.de/collection/business/ikea-taskrabbit-aufkauf-service-ausbauen
