How Has Technology Impacted the Development of International Business and the Countries’ Economic Growth Over the Last 20 Years?

Introduction

There has been huge technological growth in the 20th and 21st centuries. Informational technology (IT) has changed the global business and started the global economic development. Information and communications technology (ICT) has also changed the modern economy in many states (Neelankavil 2015). Among the key changes, innovations in information technology need to be mentioned since they have affected many areas, international business is one of them. Information technology tools have offered extra opportunities for improving communication in business, which has helped companies to expand their business to other states.

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Due to information technology innovations, organisations can nowadays cooperate with foreign partners. The big potential of information technology has opened many opportunities for companies to improve their services and communication, which increased the productiveness of international businesses.

While using information technology may cause challenges to companies in certain cases, such as the lack of the required skills and high levels of resistance among employees, the introduction of information technology into the international business setting has significantly influenced the potential of organisations and the states that they represent. Technology has affected the state economic growth, in general. A detailed study is needed to explore the effects of information technology on international business and the economic growth.

The effects of information technology on international business have been significant. Communication, quality management and resource management are three key levels of influence that can be identified (Casillas, Barbero & Sapienza 2015). Among the observed changes in the international business and GE context, improvements in communication are the most important ones since they define successful quality management and resource management (Neelankavil 2015).

The use of information technology has helped companies to move to the digital market and attract a wider range of customers, yet there are other changes (Casillas, Barbero & Sapienza 2015). With information technology, social factors were finally included in business analysis, and firms gained a chance to have a better understanding of their target audiences (Neelankavil 2015). The analysis of social issues allowed companies to improve their products and services.

Rationale

The effects of technological innovations on international business have not been studied fully yet, which makes an in-depth analysis of this matter necessary. Although there are numerous advantages, one may also face great difficulties when using technology in international business. Therefore, it is critical to analyse the effects that information technology has on international business and define key effects of information technology on international business. A careful assessment of the connection between information technology and international business, as well as the opportunities that IT provide will help to understand the effects of IT on the economic growth. In addition, future changes in the global economy can be predicted.

The need to analyse the effects of information technology on international business is also justified by the links between social factors and information technology. Innovative technologies have introduced the social dimension to international business, which has allowed global companies to analyse their target audiences better and study the effects that customers’ cultural background has on their choices.

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With new instruments for data collection and analysis, companies will understand the demands of buyers and meet these demands effectively. The analysis of the effects that information technology has had on international business will inform the decisions of organisations, enabling companies to improve their strategies and advance in the global market, leading to the rapid economic growth. Innovative approaches will help company leaders to identify the links between cultural, economic, technological and financial factors within a business setting. This in turn will help to create innovative approaches for dealing with common problems.

Objectives

The goal of the paper is to define the effects of information technology and innovative technology, in general, on international business and the levels of economic growth. Both positive and negative outcomes of technology that appeared over the past 20 years have to be examined to define the opportunities that information technology have opened for international business in the global economy. Studying the disadvantages of IT tools is also important to understand how IT affects economy.

Thus, one can increase the positive effects of IT devices and reduce the negative ones. This is very important in the global business because companies face big challenges in the global economy. By analysing opportunities and challenges of IT tools in business, one can study their effects on the economic growth.

In addition, the paper is aimed at studying the link between information technology and the economic growth rates. The paper will include the analysis of key technological improvements in the global economy. Thus, the effects of IT on the global economy will be studied in depth. The paper will focus on the different effects that information technology tools have produced in the international business, including economic, financial, social, cultural and technological trends and factors. The aim of the paper is to define the effects of the recent (1990ies-2010s) technology on the American and Chinese business.

The paper also studies the nature of changes and the factors that caused them. Finally, the effects of these changes on the global economy will be defined. In addition, the paper aims at analysing the current trends in the global economy. Opportunities for the economic growth in other states will be studied. In addition, future changes in the economic growth and development of international business will be defined. The outcomes of the analysis will help to encourage business development in digital marketing and communication. IT tools will also help to make companies form different industries to cooperate.

Research Question

This paper will answer the following question: “How Has Technology Impacted the Development of International Business and the Countries’ Economic Growth over the Last 20 Years?” By answering this question, one will understand how IT and ICT affect the economic growth and promotes a global change. In addition, the analysis will show challenges in modern business and means of managing them. Answering the research question will help to create the basis for global improvements.

Layout

This paper is structured to make the analysis of the problem as effective as possible and define the effects of IT and ICT on the economic growth. The study starts with a literature review of information technology in international business and the changes that IT has caused over the past 20 years. The literature review also explains the changes made to international business with the help of IT and ICT. Then, the research method is discussed. After the description of research methodology, the analysis of the key findings is provided. The paper ends with a summary of the findings and recommendations for the future studies.

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Literature Review

Literature Review

Technology has evolved over the past two decades, with the creation of information technology tools that have affected every area of people’s lives. These include communication, healthcare, entertainment and business, which have eased the economic growth across the world (Silva, Styles & Lages 2017). However, the changes that international business has experienced have left many effects. These effects are yet to be studied. Thus, one can define the opportunities and challenges that businesses will face in the global economy. Therefore, the impact of technology on international business has to be defined.

When considering the key trends in the recent technological growth, one should address how most economic and market-related activities moved to the digital setting. Digitalisation, new tools for data management, rise in social media’s influence and smart tools are the key changes to international business (Hagberg, Sundstrom & Egels-Zandén 2016). These shifts in the use of technology have had the deepest effects on international business affecting communication in the international business and causing economic growth in numerous states. A more detailed analysis of these changes will be needed for a better understanding of their outcomes.

Technology in International Business: Key Innovations

Move to the digital setting. Nowadays, most international businesses have to transfer their operations to the digital market. Therefore, digital technology, in general, can be seen as one of the key changes to technology over the past 20 years since it has made modern international business move to the digital market and accept the digital culture. The use of digital tools allows appealing to a wider range of customers, which creates a favourable environment for companies to expand.

This is a particularly important result of using innovative technology in the international business environment since the opportunity to grow is critical for entering foreign markets once organisations use digital tools to attract customers from all over the world.

Cloud services and big data. The significance of information has risen over the past two decades as data has started to become bigger, and its analysis has become more difficult. With the rise in the size of information, there appeared the need to store it in larger spaces and provide the constant and uninhibited access to it. Thus, for modern international business to work, every staff member has to be able to reach corporate data. Without it, a firm will work out of sync and will fail. To address this issue, cloud services have been created as one of the most effective solutions.

The current definition of a cloud service speaks for itself. According to a recent study, a cloud service is the “software system running in the cloud” (Bermbach, Wittern & Tai 2017, p. 12). There are several types of platforms for cloud service, which include the Infrastructure as a Service (IaaS), Platform as a Service (PaaS) and Software as a service (SaaS) (Bermbach, Wittern & Tai 2017). The types of cloud service mentioned above help to understand the basic concept of cloud service. However, since they are also often seen as outdated, the definition of cloud service is expanded and made general (Bermbach, Wittern & Tai 2017).

Big Data. The changes in the perception of information as a valuable resource has led to the discovery of the Big Data concept, which has affected international business. Big Data is defined by its volume and speed of transfer, as well as its primary characteristics, which include velocity, variety and value (Gandomi & Haider 2015). The use of Big Data helps companies perform a detailed analysis of external and internal factors and allows firms to define their strengths and weaknesses, their place in the competition and their competitive advantage.

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Social media and networks. Another important innovation that has changed international business is social media. In the international business context, it represents the tool for building relationships with customers and refers to any technology that allows creating and sharing user generated content (Goel 2015).

Social media should not be confused with a social network, which is an online software that helps people to use social media. social media has produced a huge effect on the development of international business. With the creation of social media and social network, product promotion has become much more effective. In social network, companies can communicate with potential buyers and market their services directly to them. Thus, organisations and especially international business can gain greater popularity and become well known across the globe.

Smart services. Information technology tools have also helped to introduce smart services to the industry for companies to use in order to control quality and improve production processes by determining errors and addressing defects in a timely manner. In addition, smart services help to respond to customers’ needs fast (Liu et al. 2016). This advantage is an important benefit that modern technologies provide since it helps organisations to build a competitive advantage.

Technology-Associated Changes in International Business

The technologies described above have effected international business and its development. While information technology changes have created both opportunities and challenges, companies could use new options to succeed. Improvements have been implemented on local and global levels, allowing international business to continue their development and facilitating the economic growth in the global market.

Supply chain management. To create an effective business model, companies need a good flow of its services. This process is known as supply chain management (SCM) and is seen as a crucial component of any company’s operations. Information technology, in turn, has created chances for improving SCM in international business, the rise in the time and effective quality management being the key ones. The increase in SCM productiveness will also cause economic growth within organisations and state economies.

Sustainable use of resources. Information technology also helps international business to improve resource management techniques by reducing the levels of waste and introducing a more effective way of managing available resources. Thus, companies will have a less negative impact on the environment by incorporating improved recycling and resource management techniques to address sustainability concerns. Companies need to ensure safety and environmentally friendly practices, which modern technology, in turn, will help international business to grow and gain influence in the global economy.

Knowledge sharing techniques. The emergence of cloud service and the related technologies has helped to encourage knowledge sharing (KS). Due to the increase in KS practices, numerous companies do not need the physical presence of their staff. Instead, employees can work remotely. With KS, organisations can hire staff from any corner of the world. This is important for several reasons. First, companies can cut the costs for renting a physical space.

This opportunity makes the workforce much cheaper, creating the basis for a cost-efficient framework in the corporate environment. In addition, KS helps to avoid numerous cases of data misuse. Without KS, information can be misinterpreted, and employees may fail to deliver important data to other departments. Without KS, a company can suffer great losses without a KS technique. information technology, in turn, has offered many opportunities for KS.

By including information technology in the international business setting, one can create the culture of KS. As a result, people will remain informed about the slightest changes made to their organisation. The KS philosophy will help organisation members to improve their decision-making process. With all data being available, people will make decisions based on current knowledge. To enhance the process of data sharing and introduce the culture of KS to an organisation, one should consider using Office 365 and similar software. Office 365 gives a chance for people to create and share knowledge (Cano-Kollmann et al. 2016).

Due to the cloud service system, Office 365 is perfect for companies. It helps manage corporate data, keep it safe and help all employees to view it. Office 365 helps to introduce order and control to data management. Therefore, information technology such as Office 365 are extremely important for international business. It allows international business to hire remote employees from all over the world. As a result, companies cut expenses and use highly skilled employees.

Digital marketing. The creation of the digital economy (digital economy) has opened new ways of meeting buyers’ needs. Digital marketing has affected international business deeply since it has helped to attract a huge number of customers. Digital marketing allows targeting as many people as a company can afford, helping an organisation to enter the global economy. The application of digital marketing to the context of the present-day economy has helped companies to satisfy the needs of a very diverse population and make their services available to all potential buyers.

Economic Growth

Another change that information technology has brought is economic efficiency. There has been a rise in organisational performance in international business. Studies show that companies have become more efficient in the global market (Temis & Gökmen 2014). This change has caused the economic growth across the globe (Temis & Gökmen 2014). Developed countries with strong international business have expanded, thus facing economic growth. With information technology and modern media, new opportunities for businesses to grow have appeared. As a result, the GDP rates have risen in many states.

A similar situation can be seen in developing countries. While they do not have large international business, they offer cheap labour force and resources. With a cost-efficient approach, they can profit by offering cheap services to large international business. Therefore, the economic growth happens globally due to innovative technology (see Fig. 1), with the past 20 years having shown especially rapid economic development (Temis & Gökmen 2014). Due to the use of information technology, international business has expanded into the global market, which has made it possible for all states to improve their economic situation. Information technology can increase productivity and affect the state economy positively. With information technology, there are much more opportunities for the constant growth.

Innovations and State Economy
Figure 1. Innovations and State Economy (Components of an innovation economy 2014)

Key Challenges Associated with Technological Concerns

At first, information technology innovations may seem as fully positive for international business. Indeed, information technology helps international business to use information more effectively and reasonably. However, companies face certain obstacles. These obstacles include mostly HR-related problems. However, technological issues may also happen in the international business.

Resistance to change. As a rule, people are suspicious about changes. It is difficult for staff members to adjust to new standards. In addition, staff members often fear failure (Shermon 2017). Therefore, employees may develop resistance to change (RC). RC has to be reduced to integrate information technology successfully into the international business. Typically, the problem can be addressed by changing the Resource Management approach and the leadership strategy (Shermon 2017). Specifically, one has to consider tools for motivating employees. It is critical to show staff members that they are valued. Thus, they will not fear failing and losing their job.

Introducing workplace benefits is also an important approach toward managing RC. Organisations should focus on creating a comfortable working environment in which staff members feel safe. In addition, international business should focus on building trust and loyalty in its staff. Building a strong support system for employees is necessary for them to feel financially and emotionally secure (Shermon 2017). As a result, the levels of RC will drop, whereas staff members will want to learn new skills. The Transformational Leadership style (TL)? is typically used to address RC. TL helps to shape employees’ corporate values and inspire them to improve their skills (Shermon 2017), offering the staff the support needed to accept changes.

In order to address the resistance to change among employees, one has to understand its stages. As Hamidianpour, Esmaeilpour & Zarei (2016) explains, there are four key elements of RC. These include “initial denial, resistance, gradual identification and devotion and contingent liabilities” (p. 85). With the use of TL, one will be able to start negotiating with employees faster and reach an agreement easier to address the issue of RC successfully.

Non-incremental innovations. Non-incremental, or disruptive, innovations (NIIs) offer both huge opportunities and great challenges. On the one hand, NIIs help change international business significantly. As a result, significant improvements can happen and companies will gain a chance to increase product quality. On the other hand, NIIs demand an immediate and radical change. Companies have to adjust to new requirements, environment, and principles of working.

The described change may not help minor firms to survive. For this reason, the philosophy of international business will have to be changed. Organisations will have to accept innovations as an important part of their value system. Innovations will need to become an element of companies’ vision and mission. As soon as companies learn to accept change, a major improvement in the international business system is expected. Companies have to make positive change a part of the organisational culture. Companies will have to include the idea of endless change into their vision and mission.

Opportunities That New Technologies Provide

In addition to numerous challenges, information technology offers many chances for organisations to succeed. These include remote collaboration, improvement in communication quality and better public relations. International business will benefit and the economic growth will take place. The technology that appeared over the past 20 years affects the current practices. In addition, innovative IT tools promote the further economic development in companies. As a result, organisations can enter the global market.

Remote collaboration. Employing remote staff members is an important strategy in international business since the use of remote staff helps companies to cut costs greatly (Shermon 2017). Thus, it is critical for firms to use information technology tools for remote work. In addition, remote work helps to enhance collaboration. Once everyone has the access to company data, people can cooperate more productively, allowing international business to expand with the help of information technology. Moreover, the use of remote staff reduces the amount of workforce-associated expenses, which helps to develop the economy Communication quality.

Information technology also improves communication vastly. Therefore, international business will improve information management and KS. Thus, information technology should be seen as essential in international business. Improved communication also leads to the economic growth due to the rise in international business. Modern information technology tools allow focusing on the dialogue between company members. As a result, organisations deliver better performances, and information technology lead to the consistent economic growth.

Public relationships. Improvements in public relationships (PR) are also an important opportunity. With the use of information technology, international business will reach out to larger groups of customers. Firms will gain greater influence in the global market as their PR becomes more effective and they will attract more buyers. Improvements in PR are important for the economic growth. They cause a positive change as they make the companies more popular. Thus, firms contribute to the economic growth of a state.

Resource management. The use of information technology can also help international business to arrange their resources. Resource management (resource management) becomes easier once modern technologies are introduced into the international business setting. For example, Resource management processes are simplified due to improved communication. Similarly, PR issues and customer relationships are managed effectively. Production and promotion issues, as well as SCM, are also managed faster. Finally, international business can manage their finances more effectively with the use of modern technology. Since digital tools are especially useful in the international business, organisations will have to include information technology into their environment.

Research Methodology

To explore the effects of the latest technological changes on international business and economic growth, a well-developed research tool is needed. This study will define the effects that technological changes have produced. In addition, current tendencies in international business and economic growth will be identified. Thus, the outcomes of information technology influence will be determined.

Research Method

This paper is aimed at defining the impact of IOT on international business and the economic growth. In this analysis, a certain amount of quantification is needed, which calls for using the quantitative research. The application of the quantitative analysis will help to identify the connections between the influence of information technology and the current trends in international business, and the tendencies in the economic growth will be evaluated.

However, there is a certain element of qualitative research as well. For example, the types of influences that modern technologies have on international business and the economic growth need to be analysed. Therefore, one should consider applying the qualitative method to the research as well. Specifically, the types of effects that information technology has on international business and the economic growth will be identified.

Therefore, the mixed research method will be used in this study. With the help of the mixed framework, one will study the cause of changes to the international business and the global economy. In addition, the effects of these changes will be explored with the help of an in-depth analysis. The use of mixed method is quite common in business research. The mixed method represents a compromise between two issues in business.

In this case, there is the need to determine the cause of changes to international business and the economic growth caused by information technology. The described issue requires the use of the qualitative method as the tool for analysing reasons for change and its effects. However, there is also the need to assess how far the change has gone. Thus, the quantitative approach is required. To find a solution to this issue, the mixed method of research is used.

The benefits of the mixed method include the opportunity to provide a context for the study. The nature of changes caused by IT tools is studied. Moreover, the mixed research method helps to see the problem from different sides and analyse it objectively.

Therefore, introducing the mixed research method is essential for the study. The use of the mixed method will allow defining the slightest impacts of information technology on international business and the economic growth. As a result, one will locate the connection between the selected information technology and the aspects of international business and the economic growth mentioned above. Furthermore, one will study the current opportunities in international business and the economic growth, making it possible to see future changes and provide detailed recommendations for the future development of information technology and international business improvement.

Research Design

The mixed research method is very complex due to the focus on several variables. This research is aimed at analysing many changes that IT tools have made to American and Chinese companies. Therefore, a mixed research design will be needed for this paper. A case study should be seen as a needed research design since it allows gathering both qualitative and quantitative data. The use of a case study will mean analysing the changes made to a particular international business (Thomas & Myers 2015). The mixed research design will provide the results that will help to create further strategies of improving international business and the economic growth with IT tools.

Case studies have been used in similar research. Case studies help to analyse changes in depth and see the effects that these changes have. A case study is usually defined as an “in-depth exploration from multiple perspectives” (Thomas & Myers 2015, p. 27). Therefore, the current definition of a case study is quite simple. A case study helps to define the connection between the study variables. However, it also gives a chance to see the effects of several factors on the research object. A case study gives a chance to find both qualitative and quantitative changes of the studied issue (Thomas & Myers 2015).

Thus, the analysis of changes in the international business and economic growth caused by It tools will be finished. Of course, embracing every single factor will be impossible. In the global economy, the number of factors affecting international business is huge (Thomas & Myers 2015). However, a case study helps to single out the most important ones and analyse them. Thus, the case study design should be used as the basis for the research.

The choice of a case study is based on the specifics of data collection. Specifically, the case study design means using not only quantitative but also qualitative tools. For example, interviews can be used along with surveys. Thus, the basis for the mixed research will be provided. A case study design will create the setting for an in-depth analysis (Thomas & Myers 2015). The concept of IT and ICT changes in international business and their effects on the economic growth will be reviewed fully. Each aspect of the problem will be studied in depth. Therefore, the use of a case study is important.

Sampling Strategy

As stated above, this research includes the use of both qualitative and quantitative research methods. Therefore, different sampling techniques will be needed in each case. In order to perform the qualitative sampling process, one will need to use purposeful sampling. The purposeful sampling approach will allow selecting the most informative samples. As a result, the required amount of information will be gathered (Baran 2016).

Moreover, the use of purposeful sampling will lead to a larger number of discoveries. It is necessary to choose the participants that are likely to provide a large amount of data. Thus, the effects of technology on international business and the economic growth will be studied in depth. The use of purposeful sampling may also help to discover the factors that were not identified previously. As a result, the sampling method will allow learning new information about IT and its effects. There is also the possibility that new variables will be found in the process.

However, the selected sampling strategy has its problems. For instance, research biases may happen during the analysis due to the selective strategy. Indeed, once participants are chosen based on specific characteristics, the outcomes of the analysis may be shifted toward the expected outcome (Baran 2016). The presence of these biases makes the use of the purposeful sampling technique slightly difficult. However, the purposeful sampling approach can be managed by introducing categories of samples and choosing the same number from each one. Thus, all populations will be represented equally. The qualitative sample will equal 10 samples.

The quantitative framework will be based on the cluster random sampling approach. After the selected sample is split into several categories, each will be reepresented equally. By using the random sampling technique, one will avoid the research biases related to the representation of the target population. The quantitative sample will include 50 samples based on the formula provided by Curtis and Drennan (2013).

Sample Size

The choice of the sample size will also need different approaches due to the use of a mixed method of research. To perform the qualitative analysis, one will need to include 20 samples since they will provide the needed amount of data. According to Curtis and Drennan (2013), 20-30 samples are typically the most common number of a quantitative analysis. In the case in question, it is important to explore as many factors as possible.

Thus, one will define the effects of information technology on international business and the economic growth accurately. However, one should also keep in mind the need to include a large amount of data. Processing a large amount of information is likely to take a lot of time and resources. Therefore, the sample was reduced to 20 items instead of 30. However, it is also necessary to represent all participants properly. For this reason, 20 samples were chosen as the most appropriate number.

One might argue that the sample of 25 items would be the best choice in this scenario. Indeed, Curtis and Drennan (2013) advise to choose 25 rather than 20 sample items when performing the analysis. However, this study aims to analyse as many factors as possible. Thus, one can see the effects of economic growth on international business. Since a large number of information technology tools have emerged over the past 20 years, the analysis may become too long. Due to the need to reduce the time needed for the study, the total number was cut to 20 items.

In addition, the sample size for the quantitative analysis has to be discussed. It was stated that 50 samples would be analysed for this study. This research will accept a 5% margin of error. In this research, the confidence level is 05%. Furthermore, the accepted margin error is 5%. With the response distribution of 50% and the total population of 1,000 participants, around 50 samples is typically deemed as a reasonable number (Curtis & Drennan 2013). The calculation was made based on the sample size formula suggested by Curtis and Drennan (2013).

Data Collection Tool

In this study, one will need to gather the information about IT tools and the economic growth. Therefore, one will need a combination of qualitative and quantitative data collection techniques. Interviews will be used for the qualitative data collection process. It is expected that interviews will provide much information about changes to international business and the economic growth that IT tools have caused.

During the interviewing process, one is expected to find an array of factors affecting the changes to international business and the economic growth around the world. The use of interviews as the method of data collection will mean managing a vast amount of data. In addition, it is expected that a big part of this data will be personal opinions. Therefore, it will be necessary to analyse the key information carefully to select only the data that is objective. Thus, research biases concerning the credibility of findings will be avoided.

As for the quantitative approach, surveys will be used to study the degree of change. The use of the Likert scale as the means of evaluating the change will be effective. The Likert scale will help one to get important information about the effect that recent technologies have had on international business and the economic growth within different states. The process of data collection will mean getting an informed consent from the target population to participate in the study. Then, surveys will be sent to the target population. As soon as the surveys are completed, the responses will be analysed statistically.

Data Analysis Tool

To explore the obtained data, one will have to use two analysis techniques. For the qualitative information, content analysis will be used. Thus, the unstructured text will be studied to find key themes in the participants’ responses. The identified themes will be grouped according to their types, and general trends will be analysed. The content analysis technique will also help to find the themes and trends that are the most important for international business currently. A big range of trends is expected to be identified. Specifically, changes in the economic, sociocultural, technological and legal aspects of companies’ functioning are expected to be observed. To analyse these changes, one will need to design a detailed classification system based on the findings.

The quantitative information will be analysed with the help of the ANOVA tool. By using the suggested approach, one will study the effects of multiple factors on the chosen variables. The ANOVA technique will provide an in-depth insight into the issue of information technology, international business and the economic growth. By determining the outcomes of the analysis, one will define the size of the effects that information technology innovations have had over the past 20 years. Thus, one will create the basis for promoting the future positive change.

Analysis

Qualitative Analysis: Key Types of Impacts Observed in the Target Environment

In order to determine the key changes within the U.S. and Chinese companies in regard to the use of IT tools in their setting, a case study design was used. After conducting a total of 20 interviews (Curtis & Drennan 2013) in Chinese and American firms, several common themes were identified and arranged., The themes of communication, technological competitiveness, innovation and investment were identified as dominant ones (see Table 1).

Table 1. Key Themes in Interviews.

Theme Sentence
Innovation “Technological changes have helped to focus on innovative solutions”
Communication “It has become easier to communicate with fellow employees and customers. Immediate feedback defines further decision-making.”
Urbanisation “Multiple job opportunities have emerged in the city. The company has provided ample opportunities for employment, which drained the rural areas of a significant amount of their population.”
Resistance to change “It was difficult to adapt.”

Quantitative Analysis: Impact of IT on Economic Growth

During the analysis, a total of 50 U.S. and Chinese businesses have been considered as the main object of the research. The rates of economic growth were linked to the technological changes that have been made to the specified businesses. The case study examined the connection between the yearly income of organisations and the number of technology-related jobs that were created within the target companies in 20 years

For this purpose, it was necessary to use the descriptive analysis. The link between companies’ income and technology-related jobs was analysed. For example, changes in the number of jobs for technical workers, such as people operating in the IT department and the changes in the companies’ performance, were identified. It was expected that the outcomes of the assessment would point to the current trend in the American and Chinese businesses in regard to the technological progress and economic growth.

The analysis was expected to help in answering the following question: How has technology affected companies’ economic growth over the past 20 years (particularly, organisations in China and the U.S.)? In order to be able to locate the impact that IT has had on organisations’ development, the changes in the number of jobs created to encourage technological growth and economic progress should be analysed.

Number of technology-related jobs in the U.S.
Figure 1. Number of technology-related jobs in the U.S.: changes (1998-2018) (Roussey 2018).

As Figure 1 indicates, there has been a noticeable growth in the number of technological jobs created in the selected states. Ranging from web developers to e-market analysis, these jobs were created to address the new demand for experts in technology and the need to use innovative technology to increase economic growth. The rise in the number of IT and ITC jobs as been a tech job boom. This change shows clearly the overall trend in the American and Chinese markets.

The increase in the number of IT jobs proves the importance of integrating IT tools into Chinese and American companies. With the understanding of the vast range of opportunities for business development that these innovations cause, the demand for expert services in providing IT services rose, as Figure 1 proves. Furthermore, Table 2 shows that there is evident correlation between the number of job offerings created for technical issues management within the selected sample of companies and the difference in the profit rates within the chosen firms.

Correlation Between Economic Growth and the Number of Tech Jobs.
Table 2. Correlation Between Economic Growth and the Number of Tech Jobs.

Therefore, the test results show that there is an evident link between the number of tech jobs that have been created in the U.S. and China and the levels of economic growth that the U.S. and China have seen. Furthermore, the outcomes of the analysis have shown a very large level of variance between the key variables, which implied that economic growth, as well as the integration of IT and ICT resources into the target economies had ups and downs. Indeed, given the history of the American technological and economic progress and the one of China, one will have to admit that China has been focusing on manufacturing as a part of the global production process.

The U.S., in turn, has been focusing on other types of processes, using Chinese resources as a way of reducing costs and avoiding risks and losses (Bhattacharya, Rafiq & Bhattacharya 2015). The main difference between the American and Chinese business setting is the rate of the economic growth. In The American market, companies have quickly improved their performance and reached success. In China, companies have been developing slower and steadier.

The responses to the questions have also shown that a large number of companies within both the U.S. and China recognise the described changes as important. Particularly, most of the responses regarding the range of the change and the effects that it has had on the development of the economy range from 4 to 5, which is almost the highest possible impact. Specifically, 67% of the participants have admitted that the effects of IT and ICT in the context of their companies has produced a large outcome and affected not only the performance of their organisations but also their own professional lives as well.

It is quite important that both Chinese and American companies that have been using IT innovations in their design and focusing on the promotion of technological changes in their setting have faced a similar problem at some point. Specifically, the issue of resistance toward change needs to be mentioned as one of the key elements of using a new strategy. The new strategy concerns managing key information and arranging company’s processes.

The outcomes of the qualitative analysis show that there has been a big positive shift in the economic development of both China and the U.S. due to the use of IT tools in the corporate environment. The introduction of Office 365 has played a particularly important role according to the results of the interviews since the participants have mentioned the vast opportunities for data sharing as the main element of the technological development. The Office 365 tool in particular seems to have produced a vastly positive effect on economic growth of the U.S. and China due to the rapid increase in their GDP rates after the introduction of the tool into most organisations within the U.S. and China.

Findings and Their Discussion

Key Themes in the Corporate Setting

The theme linked to innovation must be the most common one when considering the Chinese setting. The analysis has shown that innovation-related connections between the ongoing IT progress and the economic decisions of organisations were mentioned 167 times, which is a very large number compared to the rest of the themes that were identified in the course of interviews. Therefore, technological progress has clearly allowed introducing new concepts lined to success to the setting of Chinese and American organisations.

It is worth noting that the very idea of innovative thinking and decision-making was mentioned as the basis of the company management in 34 cases. Therefore, one has to say that the use of innovation as a part of the company’s values has become possible with the focus on using IT tools for economic success within the chosen field.

The theme of communication was the second most common topic that was brought up during the qualitative analysis, which implied that the focus on the technological development and especially the use of IT tools created the basis for the increase of a dialogue within organisations, as well as between companies and their customers. Using IT tools for communication is quite common in most organisational settings, but the effects of the change have been especially noticeable in the Chinese business.

Furthermore, one should mention the issue of data sharing as one of the key aspects that are addressed most often when discussing the effects of introducing IT innovations into the context of U.S. and Chinese organisations. The importance of knowledge management has turned out to be of particularly high importance for economic growth of American and Chinese companies since it helps to create a new setting. In this setting, employees can gain new knowledge and skills and perform better in their jobs.

Therefore, by integrating the principles of regular information sharing and the focus on acquiring new knowledge and skills through learning, one will be able to build a team of competent experts, who will be loyal to their organisation. The emphasis on communication, which the use of IT tools in the U.S. and Chinese business setting implies, also encourages economic growth within the states.

Similarly, the promotion of communication and more active information management has been said to have a deep impact on building relationships with customers. The communication issue has turned out to be of particular significance since the transition to the digital setting has made it a bit more difficult for companies to communicate with their customers effectively. While the online environment provides additional opportunities for receiving feedback from buyers, it also makes more distant relationships between organisations and their clients. Therefore, the use of the strategies is likely to increase the effects of communication between firms and their buyers. The change in the quality of communication is important to the functioning of the U.S. and Chinese companies.

The rise in communication quality is not the only positive change caused by IT tools. Another important change in Chinese and American companies is urbanisation. Urbanisation is usually defined as the development of cities and the urban environment. The changes in the urbanisation rates are not as clear in the U.S. economic environment as in China. The urbanisation rates are slower in the U.S. since there are already many urbanised settings. However, the process of urbanisation has become an important part of the Chinese economic environment. The increase in urbanisation becomes clear when considering the recent rise in economic growth in the Chinese business setting. According to a statement made recently,

In just one generation, something like 300 million+ people went from rural subsistence farming to urban industrial and technology jobs. This transition from rural poverty to export powerhouse to consumer goliath may be the most consequential economic event in centuries. (Maulin 2018, para. 2)

The described tendency is particularly obvious in the interview results when comparing the reflections of the owners of recent and older businesses in China. The analysis shows that the urbanisation rates have risen and additional job opportunities for people from rural backgrounds have been created (see Figure 2). The change in the use of IT tools has made it possible for companies to hire more people and, therefore, contributed to the development of Chinese companies.

Urbanisation rates in China
Figure 2. Urbanisation rates in China (‘China: urbanisation from 2007 to 2017’ 2017)

Although it seems unrelated to other concepts, the notion of urbanisation is linked directly to the theme of communication that was addressed during the interviews a number of times. With the increase in communication rates, the dialogue between urban and rural residents becomes more effective. The rural population has been provided with new jobs in the city and had to leave the rural setting (Rafiq, Salim & Nielsen 2016). Furthermore, the involvement in the global communication causes massive changes in the rural setting, thus causing a significant improvement in both rural and urban environments.

Correlation Between Technology and Economic Growth

During the analysis, positive correlation between technological development within organisations and their success in the business setting has been found. The observed tendency can be defined as quite obvious, yet it also informs further decisions that organisations should currently make in order to grow even larger.

In addition, IT tools help companies to meet the needs of their customers. The analysis results indicate that, after using the latest technological advances, American companies have improved greatly in their performance. For example, the use of Office 365 and similar tools provided by Microsoft has affected the sales of a range of U.S. and Chinese firms, causing a rapid increase in their performance, as Figure 2 indicates.

For instance, there has been a tendency within the American market toward profit increase. Specifically, one could observe a drop in the number of new domestic companies. This change has also caused an increase in the profit margins of the existing firms (see Figure 2). The observed change clearly shows the importance of introducing IT innovations to modern organisations to make them develop faster and more effectively.

Moreover, the use of IT tools such as Office 365, digital marketing tools, and other IT innovations suggests more effective data management. With Office 365, companies should be able to manage important information more actively and detect possible issues, threats and errors. Thus, the application of IT and ICT tools should be seen as a complete necessity when considering the options for Chinese and American companies to expand into the global market. The same recommendations apply to organisations located in other countries. However, it is also necessary to consider the technological, economic, political and legal standards of states. It is important to understand where the specified firms are founded and located to learn legal details and possible obstacles. As Pece, Simona and Salisteanu (2016) explain,

Another conclusion was that only developed OECD countries can increase the level of innovation based on research and development expenditures, and furthermore, there is an interdependence between OECD countries, since some countries ensure their innovation by using the know-how of other OECD countries. Furthermore, the innovation is created endogenous in an economy and support economic growth, but the assumption of the existence of constant yields of innovation is not sustained, indicating that innovation leads to an increase in the output for a short period of time, and cannot explain the perpetual economic growth. (p. 163)

Therefore, introducing innovations into the context of an organisation is important for its further development. Moreover, there is a high probability that a company will use the opportunity for the positive change reasonably and focus on multiplying its resources. However, the actual economic growth of the state in which the firm was founded depend on a range of other factors. Nevertheless, the importance of encouraging technological development and the use of ICT and IT into the organisational setting is huge. It provides the opportunity for a great change and makes employees improve their performance.

In addition, positive changes in the performance of U.S. and Chinese firms can be proven by considering changes in their finances. Both American and Chinese companies have increased their profits after including IT and ICT tools into their strategies. Other factors could have also affected the financial growth in the U.S. and Chinese firms. However, IT clearly is one of these factors. Innovative technology has changed firms’ marketing, communication, risk management, and other processes. IT has led to a fast increase in the firms’ profits due to changes in communication between employees and customers.

Communication between employees and managers, companies and suppliers, and other agents has also improved. For example, the changes in Chinese supplying companies such as Alibaba are very clear. Alibaba’s share prices have grown a lot after the introduction of IT tools (see Figure 3). Alibaba has managed to use digital marketing to improve communication with customers and promote its services.

Alibaba: share price change.
Figure 3. Alibaba: share price change.

Therefore, IT innovations helped Alibaba to become a part of the digital market. The firm has changed its marketing strategy and attracted many new customers because of IT changes. In addition, Alibaba made technological change a part of its strategy and focused on improvement. Thus, customer satisfaction rates have risen fast, making Alibaba a leader. Unless the organisation had decided to enter the digital market and pursue the opportunities that it had to offer, the company would have never achieved the success that it currently has. With these changes, Alibaba has become one of the key companies in China, and it continues to grow globally.

The rise in the GDP levels in China and the U.S. also proves how important the technological progress is. Specifically, there has been a rapid rise in the GDP levels in both China and the U.S. over the past 20 years (Jorgenson & Vu 2016). Although the levels of GDP have not been consistent during this time period, the general tendency toward a slow increase in the GDP of both states can be observed clearly (see Figure 4).

U.S. GDP: 1999-2019 changes.
Figure 4. U.S. GDP: 1999-2019 changes.

As Figure 4 above shows, the U.S. GDP was growing fast in 2000-2001, when the technological breakthrough occurred in American companies. With the transfer to the digital market and the creation of numerous companies for providing their services and products to customers online, additional opportunities for services to grow and improve their quality were created. Furthermore, the use of digital marketing and online purchasing options, as well as UPS product delivery also made a huge change. The opportunities for American companies working in with IT and CIT tools have increased greatly. As a result, a quick rise in the GDP rates in the U.S. has been observed.

The specified data aligns with the information obtained in the course of interviews. With the introduction of IT tools to American and Chinese organisations, a big change and a quick improvement of service quality took place.. The change in Chinese business was caused by IT tools, which helped to analyse data, send, and receive it quickly. With IT and ICT tools, organisations became capable of meeting customers’ needs with higher rates of precision and efficacy. This caused a change in the levels of the economic growth in China and the U.S. Consequently, the use of IT tools has improved the U.S. economy and helped it to gain power in the global market, making the U.S. position very stable.

China GDP: 1999-2019 changes.
Figure 5. China GDP: 1999-2019 changes.

The situation observed in China is quite different from the one of the U.S. since, in contrast to the U.S., Chinese companies do not have a history of working for quite long in the global market. The challenges that the Chinese business market has been facing with the introduction of IT tools into the companies’ environment can, therefore, be considered as slightly higher. Nonetheless, the integration of the devices allowed Chinese companies to enter the global market and use digital tools for attracting new customers and keeping old ones. As a result, the economic growth within the specified setting improved a lot. As the graph above indicates, a massive economic boost occurred in China roughly at the same time as in the U.S., which was the time of innovative digital technologies.

It is quite remarkable that the positive change in the Chinese economic growth coincides with the American one, but with lower financial development levels. The situation described above is linked to the fact that the Chinese companies do not have the history of being the leader in the global market for the most part and have only recently started gaining significant power in the global environment. Therefore, the lack of a rapid economic development is quite easy to explain given the role that China has been playing in the global economy up until recently (Dai et al. 2016).

Overall, the Chinese case of the economic development also shows the importance of introducing IT tools into global companies and using them to make the company succeed. Furthermore, the case of China shows that it is possible to build a strong competitive advantage with the help of technological innovations and communication technology. Chinese companies used IT tools to control quality and share data. Looking back at the history of the Chinese market, the long and steady growth of the Chinese economy is linked directly to the development of social media platforms such as Facebook and other tools for quick information transfer.

Since the technological boom and the introduction of IT and ICT innovations, the Chinese market has grown quickly. Indeed, with the help of the platforms such as Facebook or Alibaba, it has become easier to attract customers and advertise company’s merchandise to a wider audience. Furthermore, the specified tools have allowed Chinese businesses to enter the global market with a significant competitive advantage due to the successful digital marketing campaigns. These campaigns can be performed in the home market and, therefore, cause a high level of product or service quality and popularity.

The case of China is a particularly good example of how technologies, in general, and IT or ICT tools, in particular, affect the economic changes across the entire state. While they seem to be simple and focused on multi-cultural communication, platforms such as Facebook have played an important role in building the state economy and creating opportunities for organisations to gain a competitive advantage.

A wide range of social networks has made it possible for Chinese organisations to market their products to a much wider audience with comparatively low costs. Thus, the Chinese economy has experienced a boost in productivity. Similarly, services such as Alibaba have made it possible for Chinese companies to expand further into the global market, attracting foreign customers, investors and business partners. As a result, economic growth can increase (Lee 2014).

Indeed, the results of the survey helped to identify the trends and changes in the consumer culture over the past 20 years and showed that both in the U.S. and China people are becoming increasingly more popular for online shopping. Shopping online slowly gained much more influence than retail shops. However, it is unlikely that online stores will replace retail shops in the nearest future. Still, the change mentioned above happened very fast and became an important improvement in the Chinese economy.

Finally, the themes that have emerged in the corporate environment of both Chinese and American firms are very important to discuss. These themes show that IT and ICT tools promote information management and knowledge sharing. In addition, the study shows that IT has had a large impact on the economic progress of both states. Specifically, communication has improved in Chinese and American companies, leading to better quality.

Communication between customers and companies has also became better, making services better. With the introduction of elements of IT such as office 365, the process of sharing knowledge has become much more effective in both the U.S. and the Chinese business setting. Moreover, it is also important to mention that surveys indicated that staff members no longer keep information secret from each other to use it in the future for their career. Instead, the survey results have shown that a significant and almost similar number of people were willing to share knowledge for both their professional growth and the development of their organisation.

Overall, changes in the U.S. and Chinese companies indicate that IT and ICT tools have a vast and profound impact on economic growth within the target market. By using IT innovations, companies have succeeded in the global market and proven to be the producers of high-quality goods and services. As a result, the economy of China and the U.S. has improved a lot. While the rates of growth in the specified states cannot be considered as fully linked to each other, they clearly grow and improve their economic situation. Specifically, both the U.S. and China have shown the quick economic progress since the early 2000s.

This means that IT tools have a strong effect on the economic growth for local businesses. With the development of services such as Facebook, Alibaba and Office 365 it became possible to increase cooperation, build a strong competitive advantage and promote a company to a wider audience.

The changes in the U.S. and Chinese companies can be explained by using the Neo-Classical Theory of economic growth. The Neo-Classical Theory was designed by Schumpeter and built on the conceptual framework that he suggested. The theory states the following:

According to the growth principle in neo-classical theory, technological transformation causes an increase in the capita per person and motivates savings and investments and as a result, causes an increase to real GDP. If technological transformation ceases, the growth will also stop. (Çaliskan 2015, p. 651)

The theory states that the technological transformation inevitably leads to the change in peoples’ perception of the objective reality. In addition, it claims that technology makes people change their opinion about their role in the society. This can be applied both to the American and Chinese economic setting since IT and ICT have affected both the Chinese and American markets. Particularly, based on the key principles of the specified theoretical framework, the technological growth causes the increase in the growth of private entrepreneurship.

Technology creates chances for a rise in the GDP rates and the following increase in the economic performance of a state. The described changes can be observed in the American and Chinese markets at present. However, there are many differences in the economic growth and the use of technological tools in the market of each state.

The overview of the American business environment has shown that economic growth has been strong and quite fast over the past two decades. A quick rise in the companies’ performance could be seen in the late 90ies-early 2000ies. During this time, American companies grew very quickly and showed their ability to become globally successful. The positive change has been quite clear since then, and the levels of the economic growth have been rather high.

However, as the charts above show, this is not the case with the Chinese economic development. The Chinese market also increased in the 90ies and 2000s but its development has been very steady. This can be explained by the challenges that local businesses may face from state laws and authorities (Gu et al. 2016). The Chinese state policies are not friendly enough to owners of businesses, which makes the economic growth a bit difficult. Financial issues are especially challenging to both old and new companies in the Chinese market.

Conclusion

Understanding the factors that lead to economic growth across the world is important for helping companies to grow in the future and manage market challenges. The study of technology use in American and Chinese companies has shown that IT and ICT affects the economic growth quite a lot. For example, the number of technological jobs has increased over time in both American and Chinese markets. The described change shows that companies were ready to use IT and ICT tools to improve their services and products.

Analysing only 20 years of change may be seen as not enough to make conclusions about IT in general. In addition, the research focuses only on American and Chinese markets. This may have made the study lose its objectivity. This is a large limitation of the research that needs to be addressed. However, the analysis has shown a clear tendency toward improvement in both the American and Chinese markets.

With the use of IT and ICT tools by American and Chinese organisations, the economies have improved. Minor issues with the analysis are not going to have a big effect on the outcomes of the research. Focusing on a few companies in the U.S. and China has helped to understand the effects of IT and ICT on changes in the economic growth. The outcomes of the study have provided information for future improvements and positive changes in the U.S. and Chinese markets. In addition, the outcomes of the research can be used to help other countries. The examples of the U.S. and Chinese markets can be used to promote the economic growth across the world.

The analysis has shown a clear connection between technological changes in companies and the economic growth in a state. Innovative technology such as IT and ICT improves communication and helps organisations to meet the needs of their customers. In addition, other processes in organisations are improved. Companies’ success leads to a rise in the GDP causing the economic growth within a state. Thus, there is a direct link between the introduction of technological innovations into the corporate setting and the further economic growth of a firm. IT tools offer many opportunities for making the dialogue within a company better.

The number of mistakes made by employees drops, and the quality of the end product or service rises fast. As a result, organisations attract customers and improve the state GDP, leading to the economic growth. Therefore, it is important to introduce innovative tools into the organisational setting and use it to communicate effectively. IT and ICT help companies to manage information fast and effectively, leading to positive changes.

Using innovative technology in companies will lead to the economic growth. This idea of managing a company will make organisations move forward and meet the needs of all customers, including very diverse populations and new clients. In addition, by using innovative technology, one can cause a slow but positive change in the one’s organisation by helping its members to improve every day.

The technological change started in a company will cause a quick and positive change in the company’s vision by promoting the ideas of improvement and innovation. In addition, company’s staff can gain new knowledge and train new skills every day to keep the company successful and meet new customers’ needs. With the use of IT as the tool for promoting change, one will make the further progress possible.

Technological innovations will also lead to the professional growth of employees and make them gain new knowledge and skills. Staff education is also very important for the economic growth. Skilled staff will perform better and help companies grow, causing improvements in the state economy. Therefore, firms should focus on using innovative technology for communication and employee training.

With the use of IT and ICT tools in business communication, companies will grow in the global market, as the examples of China and the U.S. have shown. Chinese and American companies have faced rises and falls, but the recent changes have been mostly positive. The use of technological innovations has helped U.S. and Chinese firms to succeed in the global market. Technology allowed Chinese and American firms to face economic changes and enter the global market. The use of digital tools has made it possible for American and Chinese companies to increase the state economy. Positive changes can be explained by the rise in communication levels and quality rates within firms. Thus, the examples of China and the U.S. should be used by other countries to raise the state economy levels.

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