Article Report- Michael Spence

This weekend I read one chapter called “Information Technology and the Integration of the Global Economy” of Michael Spence’s The Next Convergence. First I searched about the author, Michael Spence who is a Professor of Economics at the Stern School of Business at New York University, a senior fellow at the Hoover Institution, and was the chairman of the independent Commission on Growth and Development, created in 2006 and focused growth and poverty reduction in developing countries. He won the Nobel 2001 Prize in Economic Sciences with his book, The Next Convergence, which was published by Farrar, Straus and Giroux in New York on May 10^th, 2011. Spence clearly and boldly describes what is at stake for all of us he looks ahead to how the global economy will develop over the next fifty years (Nobelprize). As I was looking for reviews for this book in the Amazon, I found that readers generally were satisfied with Spence’s informative but also refreshing and easy-to-follow contents about the great economic event of our era except that some of readers were confused and questioned about the main topic and some of readers thought the level of contents is too low that is for the undergraduate not for the scholars.

             Thirty seventh chapter of The Next Convergence, “Information Technology and the Integration of the Global Economy”, starts by underlying cell phone’s penetration in the world and with this digital communication as an emerging trends, Spence insists that they will be significant elements to connect the global economy in the world; he believes that “the reductions in time and cost by information technology are so large that they are going changing the informational structure of markets and the world in which we live” (Spence). However, on the other hand, he admits that there certainly is a downside to these powerful informational tools, including money laundering, terrorism, snooping, coordinating criminal activity, and identity theft even though revolutionary change takes time, and that time is commonly underestimated, to the regret of investors.

             Although he slightly touches various concerns about rapid development of the informational technologies such as cell phones and internet, he still argues that we cannot ignore huge benefits that digital communication brings. Other than connectivity of the world, numerous talented people are scattered around the world very randomly. In the global economy, Spence says, “goods and capital are quire mobile, but labor is much less so” (Spence). The major impact of the digital communication was automation and labor-saving technical change, but ironically, this trend also enables us to access to valuable human resources that can place in jobs that machines cannot replace.

             As one of students who majors in Economics, I enjoyed reading this article which deals with global economy developing supported by informational technologies such cell phones and internet. I agree with Spence that occupation of digital devices in our lives rapidly increases and this surely has an enormous impact on the bigger entities, businesses and the world; also, advantages they bring to us are very immense that I cannot easily give up. However, I do not think that we should patiently wait for troubles of them to be settled by themselves because as influence of network-based technologies extends, I believe the problems will increase as well.

Works Cited

"A. Michael Spence - Facts". Nobelprize.org. Nobel Media AB 2014. Web. 5 Nov 2014.

Michael Spence, “Information technology and the integration of the global economy,” in The Next Convergence: The Future of Economic Growth in a Multispeed World (2011).