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Three decades of constant progress in information and communication technologies have triggered a complex pattern of social and economic change. This technological revolution is shaping the process of globalization by providing new tools and infrastructures with which to capture global opportunities. Evolving technologies and the worldwide deregulation of the telecommunication industry cut the marginal cost of computing and communications almost to zero. The upgrading of the world economy's computing and communications infrastructure is enabling a massive increase in the crossborder information flows that serve to reduce the risks associated with unfamiliarity, speed up the arbitrage of price anomalies, and stimulate consumer demand for world-class products, services, and brands. Soon, services that used to require a local physical presence will be opened up to electronic delivery, amplifying companies' ability to reach consumers across the globe.
More subtly, technological change is also driving up the relative value of all forms of intangible asset- brands and reputation, intellectual property, software, media content, talent- throughout the world. Many of these assets have huge scale effects when leveraged globally, giving intangible-rich companies strong incentives to shape their industries along global lines. The likes of Coca-Cola, Microsoft, Glaxo Wellcome, and Marriott Hotels are benefiting from a business approach that seeks to minimize investment in fixed assets and maximize the ability to leverage brands, standards, management skills, and intellectual property across the global arena. It is no accident that such companies are among the top performers for their shareholders over the past decade.
The combination of capital market developments, broader market access, and knowledge intensification is driving an exponential change in the pace, scale, and scope of globalization. Pace is increasing because the globalization process is fueling itself- and because the infrastructure for diffusing technology and ideas globally has become much more powerful. Scale, because the share of world GDP that is effectively globalized is set to rise from around 20 percent today to well over 50 percent in the next 10 to 15 years. And scope, because as globalization's footprint expands, so do opportunities to combine resources and segment markets in new ways.