Community Need Project Rubric The Community Need Projec.docx

Community Need Project Rubric
The Community Need Project has four important issues that
need to be addressed: the description of the community,
the description of the need/problem, the strategy to meet the
need, and the assessment plan. This rubric examines each
of these elements as well as the writing associated with the
plan. In the case of a media presentation, the writing
sections will be modified to assess the PowerPoint and the
voice-over.
Attribute Evaluated POS
PTS
PTS
1. Community and Key Stakeholders – This element looks at the
first section of the project. A 1
indicates a major deficiency in this section: poor description of
the community, no demographic
information provided, no values and belief information
provided, and no identification of the major
stakeholders, or contradictory information provided. A 20 is
awarded for a clear and insightful
examination of the community that includes an introduction to
the community, demographic
information, values/beliefs information and discussion of the
key stakeholders. Projects receiving a
20 also capture the imagination of the reader and paint a picture
of the community.

20
2. Need to be Addressed – This element looks at how well you
were able to articulate the need
(problem). A 1 indicates that there is no need identified and no
explanation of the need and how the
need impacts the community is omitted. A 20 indicates that the
need is clearly identified, the nature
of the need is discussed, the reason it should be addressed is
explored, and the impact on the
community is examined; furthermore, the use of language helps
create compelling case for meeting
the need.
20
3. Plan to Meet the Need – This area focuses on the plan to meet
the need or solve the problem. A 1
indicates that there is no coherent plan articulated to meet the
need. A 20 indicates that there is a
thoughtful plan that is sufficiently integrated, addresses the
issues of key stakeholders, and discusses
in general terms the outcome for the community of meeting the
need.
20
4. Assessment Plan – This element focuses on the assessment
plan. A 1 indicates that the
assessment plan is missing. A 20 is awarded when the two
meaningful goals have appropriate
measurement strategies and an overall plan that could generate
actionable data.
20

5. Organization, Language, Tone, & Sentence Structure– The
use of language, the tone, and the
sentence structure are evaluated against the appropriateness for
a college level course. On this
scale, 1 is inappropriate use of language, multiple wrong words
selected, overly simplistic sentence
structure, and/or a tone derived from the choice of words that
undermines the project. Projects that
also lack organization including a summary conclusion are
awarded a 1. A 10 indicates an elegant use
of language and sentence structure that balances an
understanding of the audience with the need to
communicate the essence of the project. Additionally, the paper
meriting a 10 is well organized,
flows smoothly through the four sections and includes a
summary conclusion.
10
6. Grammar and Punctuation – The expectation is that you use
appropriate grammar and have
appropriate punctuation. Too many mistakes indicate that you
don’t take the work seriously, so the
reader should not either. A 1 on this scale indicates that there
are numerous grammatical and
punctuation errors which encourage the reader to stop reading.
A 10 indicates that there were few if
any mistakes and those errors did not interfere reader’s support
for the project.
10
7. Documentation – You appropriately identify source material
used in your arguments. Although
there are no points for this rubric, as you are expected to

appropriately source other works. Please
refer to NEC’s academic honesty policies and the APA format.
0
Total Points/Letter Grade 100
Comments & Observations:
Morris, International Business, 1e
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Introduction
11.1 Technology as
Physical Infrastructure
11.2 Technology of
Information
Infrastructure
11.3 Technology of
Human Infrastructure
11.4 Technology Trends
in International Business
Summary and Case
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Chapter 11 Reading Quiz
APPENDIX
11.4 Technology Trends in International Business
LEARNING OBJECTIVE
Discuss how global business leaders position their firms to take
advantage of technological opportunities.
The creation of new technologies can have a profound impact on
global business opportunities. For instance,
Safaricom (one of the largest mobile operators in Kenya) and
Vodacom (the African arm of Vodafone of the
United Kingdom, which owns a 40 percent stake in Safaricom)
teamed up ten years ago to provide a new
product called M-Pesa. This simple but effective phone-based
money transfer system enables individuals to
deposit, withdraw, transfer, buy mobile minutes and data, and
even pay for goods and services with a simple
text message. Most Kenyans don't have access to a bank and
don't have enough funds to open a bank account
anyway. M-Pesa provides an alternative to the traditional

banking system but provides similar benefits for
individuals: they are able to securely store and use their money.
The product has been very successful in Kenya. In that country
of 44 million people, M-Pesa has nearly 20
million registered users, including 90 percent of adults. The
system is supported by more than 90,000 M-Pesa
agents who act as points of contact for customers, enabling
them to deposit and withdraw money from their M-
Pesa accounts. M-Pesa payments now represent over 40 percent
of the country's GDP. Nearly everyone in
the country is using the service to buy and sell goods and
services and to send money. Because it provides
benefits like those of banking—with perhaps even more
convenience—it has improved the lives of millions.
Not only is the technology of M-Pesa providing individuals with
value, it has provided many opportunities for
business. For instance, because it offers a secure payment
process, employers use it to pay salaries. When M-
Pesa entered Afghanistan, the government there also began
using M-Pesa to pay salaries. Immediately, police
officers saw a roughly 30 percent increase in their paychecks
because the process cut out corrupt officials who
had been skimming the officers' salaries. M-Pesa also reduces
crime because individuals are not walking
around with cash, so there is less incentive for robberies. The
service not only benefits the companies and
customers that use it, but according to Bob Collymore, the CEO
of Safaricom, the company makes a $250-
million-a-year profit.
In addition to making money for the company and providing a
valuable service to millions, this new technology
has paved the way for a flood of entrepreneurial ventures. For
instance, M-KOPA Solar offers customers in

Kenya, Tanzania, and Uganda a “4-watt rooftop solar panel, a
control box that attaches to the wall of a home or
business, three lamps, and mobile-phone chargers.” To
purchase the $200 unit, the company requires a
roughly $35 down payment and then a daily payment of 40
Kenyan shillings, or about 40 cents, for 365 days,
until the unit is paid off. The customer uses M-Pesa to make the
daily payment, and if the payment is not made,
the lights will not turn on until payments resume. The $200 cost
may seem high, but it is actually cheaper than
the kerosene lamp alternative most Kenyans currently use.
Moreover, once the unit is paid for, the customer
gets free power. The opportunity to invest in their personal
energy needs has improved the lives of over
400,000 customers.
Similarly, the village of Njogu-ini installed a clean-water well
that uses mobile payments through the M-Pesa
platform. Residents simply walk to the well and use their phone
to pay the small fee to activate the pump,
providing them access to clean water. Water obtained this way
costs about $6 a month per person. The critical
feature is that the technology allows micropayments that are
reasonable in the context of Kenyan life, while still
enabling villagers to get clean water.
Now that the technology has been established, Safaricom is
using the M-Pesa platform to expand to provide
other services, such as mobile health care initiatives. The
mHealth Kenya service enables doctors to remotely
diagnose patients using cell phones, and patients can pay
providers using their M-Pesa accounts. In addition,
the government of Kenya is using M-Pesa to distribute e-
vouchers for prenatal care in an effort to increase the
health of mothers and babies.

94 95
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100
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NEXT
CHAPTER RESOURCES
Reading Content
Introduction
11.1 Technology as
11.2 Technology of
Information
Infrastructure
11.3 Technology of
Summary and Case
ORION: Build your
Proficiency
Videos
Animations

Business Hot Topics
COURSE RESOURCES
Career Center
Business Hot Topics
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Animations
PRACTICE
APPENDIX
11.4 Technology Trends in International Business
LEARNING OBJECTIVE
Discuss how global business leaders position their firms to take
advantage of technological opportunities.
The creation of new technologies can have a profound impact on
global business opportunities. For instance,
Safaricom (one of the largest mobile operators in Kenya) and
Vodacom (the African arm of Vodafone of the
United Kingdom, which owns a 40 percent stake in Safaricom)
teamed up ten years ago to provide a new
product called M-Pesa. This simple but effective phone-based
money transfer system enables individuals to
deposit, withdraw, transfer, buy mobile minutes and data, and
even pay for goods and services with a simple
text message. Most Kenyans don't have access to a bank and
don't have enough funds to open a bank account
anyway. M-Pesa provides an alternative to the traditional
banking system but provides similar benefits for
individuals: they are able to securely store and use their money.

The product has been very successful in Kenya. In that country
of 44 million people, M-Pesa has nearly 20
million registered users, including 90 percent of adults. The
system is supported by more than 90,000 M-Pesa
agents who act as points of contact for customers, enabling
them to deposit and withdraw money from their M-
Pesa accounts. M-Pesa payments now represent over 40 percent
of the country's GDP. Nearly everyone in
the country is using the service to buy and sell goods and
services and to send money. Because it provides
benefits like those of banking—with perhaps even more
convenience—it has improved the lives of millions.
Not only is the technology of M-Pesa providing individuals with
value, it has provided many opportunities for
business. For instance, because it offers a secure payment
process, employers use it to pay salaries. When M-
Pesa entered Afghanistan, the government there also began
using M-Pesa to pay salaries. Immediately, police
officers saw a roughly 30 percent increase in their paychecks
because the process cut out corrupt officials who
had been skimming the officers' salaries. M-Pesa also reduces
crime because individuals are not walking
around with cash, so there is less incentive for robberies. The
service not only benefits the companies and
customers that use it, but according to Bob Collymore, the CEO
of Safaricom, the company makes a $250-
million-a-year profit.
In addition to making money for the company and providing a
valuable service to millions, this new technology
has paved the way for a flood of entrepreneurial ventures. For
instance, M-KOPA Solar offers customers in
Kenya, Tanzania, and Uganda a “4-watt rooftop solar panel, a
control box that attaches to the wall of a home or

business, three lamps, and mobile-phone chargers.” To
purchase the $200 unit, the company requires a
roughly $35 down payment and then a daily payment of 40
Kenyan shillings, or about 40 cents, for 365 days,
until the unit is paid off. The customer uses M-Pesa to make the
daily payment, and if the payment is not made,
the lights will not turn on until payments resume. The $200 cost
may seem high, but it is actually cheaper than
the kerosene lamp alternative most Kenyans currently use.
Moreover, once the unit is paid for, the customer
gets free power. The opportunity to invest in their personal
energy needs has improved the lives of over
400,000 customers.
Similarly, the village of Njogu-ini installed a clean-water well
that uses mobile payments through the M-Pesa
platform. Residents simply walk to the well and use their phone
to pay the small fee to activate the pump,
providing them access to clean water. Water obtained this way
costs about $6 a month per person. The critical
feature is that the technology allows micropayments that are
reasonable in the context of Kenyan life, while still
enabling villagers to get clean water.
Now that the technology has been established, Safaricom is
using the M-Pesa platform to expand to provide
other services, such as mobile health care initiatives. The
mHealth Kenya service enables doctors to remotely
diagnose patients using cell phones, and patients can pay
providers using their M-Pesa accounts. In addition,
the government of Kenya is using M-Pesa to distribute e-
vouchers for prenatal care in an effort to increase the
health of mothers and babies.
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第 1 ⻚⻚（共 4 ⻚⻚）
M-Pesa has changed the economic landscape in Kenya and is
expanding to Tanzania, Afghanistan, South
Africa, India, Eastern Europe, and more. The simple but
effective technology is also starting to be copied by
other companies in more advanced markets. Tencent—a large
computer technology company in China—has
announced WeChat mobile payments, and even Apple is
working on a text-based payment system that would
enable users to text money to one another.
All these opportunities—and countless more—came about
because a new technology enabled millions of
Kenyans, traditionally overlooked by international businesses,
to safely store money and make mobile
payments.
The Globalization of Research and Development
Historically, international companies conducted their research

and development (R&D) at their corporate
headquarters and pushed the products they invented there to the
rest of the world. Over the past decade, this
strategy has changed in two ways. First, international
companies are spending more money on R&D.
Second, they have moved R&D to locations around the world,
particularly China and India.
When looking at R&D trends, most analyses focus on the level
of gross expenses on research and
development (GERD). For instance, total worldwide GERD in
2001 was just $753 billion. Five years later, in
2006, it had ticked up to $1.05 trillion, and in 2011, the amount
passed $1.43 trillion—nearly double the 2001
figure. The trend has accelerated, with GERD topping $1.88
trillion in 2015. At that level, roughly 1.75 percent
of world GPD is being spent on R&D. Of that, over $1.80
trillion is being spent by the top forty countries ranked
by GDP. The United States represents more than 26 percent of
global spending, China accounts for over 20
percent, and Japan comes in third with nearly 9 percent of
worldwide R&D spending.
While the amount of R&D spending is increasing everywhere, it
is growing most rapidly in Asia, as global
companies rush to fill the needs of the world's largest markets—
China and India. A recent National Science
Foundation report highlights this increase, noting that, while
R&D spending is increasing in the United States
and the European Union, the increase is proportional to
increases in the countries' GDP. In Asia, on the
other hand, R&D is increasing at a rate faster than the growth of
GDP. These trends are highlighted in Figure
11.15.
102

103
104
105
106
107
M-Pesa has changed the economic landscape in Kenya and is
expanding to Tanzania, Afghanistan, South
Africa, India, Eastern Europe, and more. The simple but
effective technology is also starting to be copied by
other companies in more advanced markets. Tencent—a large
computer technology company in China—has
announced WeChat mobile payments, and even Apple is
working on a text-based payment system that would
enable users to text money to one another.
All these opportunities—and countless more—came about
because a new technology enabled millions of
Kenyans, traditionally overlooked by international businesses,
to safely store money and make mobile
payments.
The Globalization of Research and Development
Historically, international companies conducted their research
and development (R&D) at their corporate
headquarters and pushed the products they invented there to the
rest of the world. Over the past decade, this
strategy has changed in two ways. First, international
companies are spending more money on R&D.
Second, they have moved R&D to locations around the world,
particularly China and India.

When looking at R&D trends, most analyses focus on the level
of gross expenses on research and
development (GERD). For instance, total worldwide GERD in
2001 was just $753 billion. Five years later, in
2006, it had ticked up to $1.05 trillion, and in 2011, the amount
passed $1.43 trillion—nearly double the 2001
figure. The trend has accelerated, with GERD topping $1.88
trillion in 2015. At that level, roughly 1.75 percent
of world GPD is being spent on R&D. Of that, over $1.80
trillion is being spent by the top forty countries ranked
by GDP. The United States represents more than 26 percent of
global spending, China accounts for over 20
percent, and Japan comes in third with nearly 9 percent of
worldwide R&D spending.
While the amount of R&D spending is increasing everywhere, it
is growing most rapidly in Asia, as global
companies rush to fill the needs of the world's largest markets—
China and India. A recent National Science
Foundation report highlights this increase, noting that, while
R&D spending is increasing in the United States
and the European Union, the increase is proportional to
increases in the countries' GDP. In Asia, on the
other hand, R&D is increasing at a rate faster than the growth of
GDP. These trends are highlighted in Figure
11.15.
102
103
104
105

106
107
17;39
第 2 ⻚⻚（共 4 ⻚⻚）
FIGURE 11.15 Total R&D spending and R&D spending as a
percentage of GDP for select countries,
1981–2011 Source: “Chapter 4. Research and Development:
National Trends and International
Comparisons,” in “Science and Engineering Indicators 2014,”
National Science Foundation, February 2014,
www.nsf.gov/statistics/seind14/index.cfm/chapter-4/c4s2.htm.
Private businesses, governments, higher education institutions,
and private nonprofit donors typically invest in
R&D. In the United States, nearly 70 percent of R&D is funded
by businesses; that's less than the 83 percent in
Israel but much more than the 36 percent funded by businesses
in India. Perhaps more interesting is the nearly
universal increase in business-sponsored funding (see Figure
11.16), indicating that global businesses are
recognizing the competitive advantages that come from being at
the forefront of technology.
Share of total (%)
Country
GERD PPP
($billions) Business Government
Institutions of higher

education
Private
nonprofit
R&D funding sources
United States
(2011)
$429.1 58.6% 31.2% 6.4% 3.8%
China (2011) $208.2 73.9% 21.7% NA 1.3%
Japan (2011) $146.5 76.5% 16.4% 6.6% 0.5%
Germany (2010) $93.1 65.6% 30.3% 0.2% 3.9%
South Korea
(2011)
$59.9 73.7% 24.9% 1.2% 0.2%
France (2010) $51.9 53.5% 37.0% 1.8% 7.6%
United Kingdom
(2011)
$39.6 44.6% 32.2% 6.2% 17.0%
** = included in data for other performing sectors; NA = not
available.
GERD = gross expenditures on R&D; PPP = purchasing power
parity.
FIGURE 11.16 Percentage of GERD by funding source, 2005–

2011 Gross expenditures on R&D for
selected countries, by performing sector and funding sources:
2011 or most recent year Source: Adapted
by the authors from “Chapter 4. Research and Development:
The shift toward business-sponsored R&D is driven by the rise
within emerging markets of local companies that
develop advanced products for local and global customers. In
response, many multinational companies are
shifting R&D into those same markets to reclaim an edge. For
instance, GE built R&D centers in China and
India in 2000, expanded to Israel and Brazil in 2011, and
entered Saudi Arabia in 2015. As a result, GE
has introduced to its global customer base new products that
were designed for a local market such as India.
As a result, the company is now meeting customer needs
different from those it traditionally focused on.
108
109 110 111
Concept Check 11.4 ! "
Question 1 of 3 NEXT NEXT
Question 1
There is a positive correlation between education spending and
economic output.
FIGURE 11.15 Total R&D spending and R&D spending as a

percentage of GDP for select countries,
1981–2011 Source: “Chapter 4. Research and Development:
Private businesses, governments, higher education institutions,
and private nonprofit donors typically invest in
R&D. In the United States, nearly 70 percent of R&D is funded
by businesses; that's less than the 83 percent in
Israel but much more than the 36 percent funded by businesses
in India. Perhaps more interesting is the nearly
universal increase in business-sponsored funding (see Figure
11.16), indicating that global businesses are
recognizing the competitive advantages that come from being at
the forefront of technology.
Share of total (%)
Country
GERD PPP
($billions) Business Government
Institutions of higher
education
Private
nonprofit
R&D funding sources
United States
(2011)
$429.1 58.6% 31.2% 6.4% 3.8%

China (2011) $208.2 73.9% 21.7% NA 1.3%
Japan (2011) $146.5 76.5% 16.4% 6.6% 0.5%
Germany (2010) $93.1 65.6% 30.3% 0.2% 3.9%
South Korea
(2011)
$59.9 73.7% 24.9% 1.2% 0.2%
France (2010) $51.9 53.5% 37.0% 1.8% 7.6%
United Kingdom
(2011)
$39.6 44.6% 32.2% 6.2% 17.0%
** = included in data for other performing sectors; NA = not
available.
GERD = gross expenditures on R&D; PPP = purchasing power
parity.
FIGURE 11.16 Percentage of GERD by funding source, 2005–
2011 Gross expenditures on R&D for
selected countries, by performing sector and funding sources:
2011 or most recent year Source: Adapted
by the authors from “Chapter 4. Research and Development:
The shift toward business-sponsored R&D is driven by the rise
within emerging markets of local companies that

develop advanced products for local and global customers. In
response, many multinational companies are
shifting R&D into those same markets to reclaim an edge. For
instance, GE built R&D centers in China and
India in 2000, expanded to Israel and Brazil in 2011, and
entered Saudi Arabia in 2015. As a result, GE
has introduced to its global customer base new products that
were designed for a local market such as India.
As a result, the company is now meeting customer needs
different from those it traditionally focused on.
108
109 110 111
Question 1
There is a positive correlation between education spending and
economic output.
17;39
第 3 ⻚⻚（共 4 ⻚⻚）
Copyright © 2018 by John Wiley & Sons, Inc. All rights
reserved.
Question Attempts: 0 of 1 used CHECK ANSWER
True

False
reserved.
True
False
17;39
第 4 ⻚⻚（共 4 ⻚⻚）
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Introduction
11.1 Technology as
11.2 Technology of
Information
Infrastructure
11.3 Technology of

Summary and Case
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APPENDIX
11.3 Technology of Human Infrastructure
LEARNING OBJECTIVE
Describe the effect of human capital on opportunities in a
global business.
Global companies not only face physical and information
infrastructure challenges but also are often
constrained by the level of human capital that is available in a
market. Several factors are indicators of the
availability of human capital. As Figure 11.13 suggests, these
include education, corporate training, and
alignment of educational, company, and government initiative

to build human capital. We now discuss each of
these in turn.
FIGURE 11.13 A Framework for assessing the level of
technological infrastructure in countries Human capital
infrastructure includes education, corporate training, and
cooperation between companies, educational institutions, and
governments.
Education
Human capital is the abilities, skills, experience, and knowledge
possessed by individuals. The quality of
human capital can have important implications for the growth
and development of opportunities for
international business. Economic output, for instance, is a
function of labor and technology. If labor (human
capital) is skilled, it will produce higher output per person per
hour, leading to growth. Education is thus
positively associated with positive economic outcomes.
According to the National Center for Education
Statistics, the United States spends about $12,000 per child per
year for elementary and secondary education
and more than $26,000 per student per year for postsecondary
education—the highest amount in the OECD
(see Figure 11.14). Note the positive slope of the line in Figure
11.14; this suggests that higher spending on
education is correlated with higher GDP per person in a
country. In other words, the more a country invests in
education, the more wealthy it is likely to be.
73
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CHAPTER RESOURCES

Reading Content
Introduction
11.1 Technology as
11.2 Technology of
Information
Infrastructure
11.3 Technology of
Summary and Case
ORION: Build your
Proficiency
Videos
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COURSE RESOURCES
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Business Hot Topics
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PRACTICE
APPENDIX
11.3 Technology of Human Infrastructure
LEARNING OBJECTIVE

Describe the effect of human capital on opportunities in a
global business.
Global companies not only face physical and information
infrastructure challenges but also are often
constrained by the level of human capital that is available in a
market. Several factors are indicators of the
availability of human capital. As Figure 11.13 suggests, these
include education, corporate training, and
alignment of educational, company, and government initiative
to build human capital. We now discuss each of
these in turn.
FIGURE 11.13 A Framework for assessing the level of
technological infrastructure in countries Human capital
infrastructure includes education, corporate training, and
cooperation between companies, educational institutions, and
governments.
Education
Human capital is the abilities, skills, experience, and knowledge
possessed by individuals. The quality of
human capital can have important implications for the growth
and development of opportunities for
international business. Economic output, for instance, is a
function of labor and technology. If labor (human
capital) is skilled, it will produce higher output per person per
hour, leading to growth. Education is thus
positively associated with positive economic outcomes.
According to the National Center for Education
Statistics, the United States spends about $12,000 per child per
year for elementary and secondary education
and more than $26,000 per student per year for postsecondary
education—the highest amount in the OECD
(see Figure 11.14). Note the positive slope of the line in Figure
11.14; this suggests that higher spending on

education is correlated with higher GDP per person in a
country. In other words, the more a country invests in
education, the more wealthy it is likely to be.
73
17;38
第 1 ⻚⻚（共 4 ⻚⻚）
FIGURE 11.14 Postsecondary Spending In 2012, among OECD
countries, the United States spent the
most per student on postsecondary education. Source:
“Education Expenditures by Country,” National
Center for Education Statistics, Institute of Education Sciences,
May 2017,
http://nces.ed.gov/programs/coe/indicator_cmd.asp.
ManpowerGroup conducts surveys of global business leaders
each year to ask them questions about hiring
global talent. According to the 2016 survey, 40 percent of the
42,000 participating employers indicated they
were facing a skills shortage, or having difficulty finding
people with the right skills to fill vacant positions.
The survey reaches companies in forty-three countries, so this is
not a localized effect. Basic skills like
reading, writing, and math are not the problem; rather, specific
skills like mobile app design, nursing, and
sales are in short supply. This skill shortage is particularly
acute in Japan, where 83 percent of employers
report having trouble. Some economists argue that a skills
shortage should not exist because the
unemployed would just move to fill the jobs, but others are
quick to point out that those currently unemployed

simply do not have the skill sets needed for the available jobs,
and in many countries laws prohibit those
who do have the skills from immigrating to the country. For
instance, given the United Kingdom's 2016
decision to leave the EU (“Brexit”), many are fearful that the
skills shortage in the United Kingdom will
increase.
Students at a university in Seoul, South Korea, come from
across the world—Brazil, Kenya, Pakistan, India,
Nigeria, Turkey, Romania, Vietnam, and other countries—
because their own countries faced severe skills
shortages. Samsung recognized the skills shortages in these
countries when it tried to find people who could
run its global electronics operations. To combat the shortage,
the company recruited the brightest
undergraduate students from their home countries and gave
them scholarships to study for an MBA in Korea.
Upon graduation, the students would work for Samsung in
Korea for a couple of years to further refine their
skills. After that time, they would return to their home countries
with all the skills to lead Samsung's
businesses in these markets. This solution was effective for a
time, but it was expensive for Samsung. Worse
still, the newly trained employees were often hired away by
other global companies in the local markets—after
all, they were often some of the most skilled employees in their
country.
While most countries provide primary education for the
majority of their populations, the quality of this
education varies greatly. India operates the largest education
system in the world, and that alone brings
many challenges. Often, schools lack basic resources such as
desks, books, and even teachers. In
response, despite the availability of public education, roughly

40 percent of families choose to send their
children to private schools—even though private education
represents a significant cost to the family. This
trend is common throughout Asia. In Japan, Singapore, and
Korea, families commonly invest heavily in
private education, sending their children to after-school classes
for math, English, and the sciences. After-
school classes are so aggressive and competitive in Korea that
the government instituted laws requiring
schools to close at 10 p.m. and not start again before 6 a.m.
Corporate Training and Development
In addition to the level of education within a country, corporate
training has important effects on human capital.
Global companies spend over $130 billion a year on corporate
training—nearly double the estimated $70
74
75
76
77
78
79
80
81
82
FIGURE 11.14 Postsecondary Spending In 2012, among OECD

countries, the United States spent the
most per student on postsecondary education. Source:
“Education Expenditures by Country,” National
Center for Education Statistics, Institute of Education Sciences,
May 2017,
http://nces.ed.gov/programs/coe/indicator_cmd.asp.
ManpowerGroup conducts surveys of global business leaders
each year to ask them questions about hiring
global talent. According to the 2016 survey, 40 percent of the
42,000 participating employers indicated they
were facing a skills shortage, or having difficulty finding
people with the right skills to fill vacant positions.
The survey reaches companies in forty-three countries, so this is
not a localized effect. Basic skills like
reading, writing, and math are not the problem; rather, specific
skills like mobile app design, nursing, and
sales are in short supply. This skill shortage is particularly
acute in Japan, where 83 percent of employers
report having trouble. Some economists argue that a skills
shortage should not exist because the
unemployed would just move to fill the jobs, but others are
quick to point out that those currently unemployed
simply do not have the skill sets needed for the available jobs,
and in many countries laws prohibit those
who do have the skills from immigrating to the country. For
instance, given the United Kingdom's 2016
decision to leave the EU (“Brexit”), many are fearful that the
skills shortage in the United Kingdom will
increase.
Students at a university in Seoul, South Korea, come from
across the world—Brazil, Kenya, Pakistan, India,
Nigeria, Turkey, Romania, Vietnam, and other countries—
because their own countries faced severe skills
shortages. Samsung recognized the skills shortages in these

countries when it tried to find people who could
run its global electronics operations. To combat the shortage,
the company recruited the brightest
undergraduate students from their home countries and gave
them scholarships to study for an MBA in Korea.
Upon graduation, the students would work for Samsung in
Korea for a couple of years to further refine their
skills. After that time, they would return to their home countries
with all the skills to lead Samsung's
businesses in these markets. This solution was effective for a
time, but it was expensive for Samsung. Worse
still, the newly trained employees were often hired away by
other global companies in the local markets—after
all, they were often some of the most skilled employees in their
country.
While most countries provide primary education for the
majority of their populations, the quality of this
education varies greatly. India operates the largest education
system in the world, and that alone brings
many challenges. Often, schools lack basic resources such as
desks, books, and even teachers. In
response, despite the availability of public education, roughly
40 percent of families choose to send their
children to private schools—even though private education
represents a significant cost to the family. This
trend is common throughout Asia. In Japan, Singapore, and
Korea, families commonly invest heavily in
private education, sending their children to after-school classes
for math, English, and the sciences. After-
school classes are so aggressive and competitive in Korea that
the government instituted laws requiring
schools to close at 10 p.m. and not start again before 6 a.m.
Corporate Training and Development
In addition to the level of education within a country, corporate

training has important effects on human capital.
74
75
76
77
78
79
80
81
82
17;38
第 2 ⻚⻚（共 4 ⻚⻚）
billion spent on public education in the U.S. alone. This
training is designed to develop a range of skills such
as leadership, negotiation, and sales. Many global companies
have formal leadership development programs
that recruit employees into two- to four-year rotational
programs with opportunities to learn different facets of

the company. MetLife, GE, IBM, and many others offer such
programs across a host of functional areas,
including global human resources, global supply chain, global
leadership, and global marketing.
In addition to these longer formal programs, most global
companies offer skill-based training, much of which
takes advantage of new technologies by moving online. New
companies such as edX, Coursera, and
Udemy offer classes for people around the globe. The use of
virtual technologies has shifted corporate
training closer to employees and has made it more hands-on.
In addition to providing internal corporate training, some
companies partner with employers and employees to
identify the skills lacking in the labor market and then develop
those skills, working directly with individuals to
build them. For instance, LabourNet is a service in India with a
mission to provide training and skill
development to workers who are not in formal jobs, with a goal
of providing vocational training to 1 million
workers.
Industry, Education, and Government
The quality of the human capital infrastructure is influenced not
only by the level of education and training
available in countries but also by the level of collaboration and
coordination among companies, educational
institutions, and government agencies. Global industries
struggle when companies don't work with universities
to determine current and future needs, when universities and
governments don't work together on research
and development, and when industry and government fail to set
priorities and agendas. When companies,
universities, and governments work together, however, they can
build world-class opportunities. For instance,

Germany successfully cultivated a booming synthetic dye
industry by bringing together companies' resources,
universities' research, and the government's money.
Similarly, Silicon Valley in California became a world-class
center for technology by bringing together
academics from Stanford and Berkley, including tech firms from
the Valley, and gaining government support
from nearby municipalities. The city of Tel Aviv, Israel, sought
to replicate the Silicon Valley model by
combining government support, educational resources, and
business forces to create a tech hub. The
government requires all men and women to join the Israeli army
and puts the brightest in high-tech
intelligence units such as its famous Unit 8200, where it trains
them on cutting-edge technologies and
encourages them to pursue tech opportunities after their two-
year military service. The businesses of the
country also spend the most per capita on research and
development. Finally, universities in Israel provide
world-class programs, particularly in engineering and
information technology. The combination of these forces
has resulted in an abundance of tech start-ups that have created
significant economic growth.
On the other hand, where governments, industries, or
educational institutions are not supportive and do not
work together, businesses are forced to develop or find
resources on their own, narrowing the margins for
success.
One of the key organizations that can bring firms, universities,
and governments together is a “business
incubator.” A business incubator is a company that helps found
and grow new businesses. It provides new
companies with space, tools, and leadership skills to help

accelerate their early growth. For instance, MIT has
created an organization called the Global Startup Lab (GSL),
which provides resources to undergraduate
students from emerging markets. In addition to providing
resources directly to students, the GSL partners with
institutions such as governments, businesses, and universities in
emerging markets, with the goal of helping
students develop commercial opportunities.
83
84
85
86
87
88
89
90
91
92
93
Question 1

Digital technology infrastructure includes:
billion spent on public education in the U.S. alone. This
training is designed to develop a range of skills such
as leadership, negotiation, and sales. Many global companies
have formal leadership development programs
that recruit employees into two- to four-year rotational
programs with opportunities to learn different facets of
the company. MetLife, GE, IBM, and many others offer such
programs across a host of functional areas,
including global human resources, global supply chain, global
leadership, and global marketing.
In addition to these longer formal programs, most global
companies offer skill-based training, much of which
takes advantage of new technologies by moving online. New
companies such as edX, Coursera, and
Udemy offer classes for people around the globe. The use of
virtual technologies has shifted corporate
training closer to employees and has made it more hands-on.
In addition to providing internal corporate training, some
companies partner with employers and employees to
identify the skills lacking in the labor market and then develop
those skills, working directly with individuals to
build them. For instance, LabourNet is a service in India with a
mission to provide training and skill
development to workers who are not in formal jobs, with a goal
of providing vocational training to 1 million
workers.
Industry, Education, and Government
The quality of the human capital infrastructure is influenced not

only by the level of education and training
available in countries but also by the level of collaboration and
coordination among companies, educational
institutions, and government agencies. Global industries
struggle when companies don't work with universities
to determine current and future needs, when universities and
governments don't work together on research
and development, and when industry and government fail to set
priorities and agendas. When companies,
universities, and governments work together, however, they can
build world-class opportunities. For instance,
Germany successfully cultivated a booming synthetic dye
industry by bringing together companies' resources,
universities' research, and the government's money.
Similarly, Silicon Valley in California became a world-class
center for technology by bringing together
academics from Stanford and Berkley, including tech firms from
the Valley, and gaining government support
from nearby municipalities. The city of Tel Aviv, Israel, sought
to replicate the Silicon Valley model by
combining government support, educational resources, and
business forces to create a tech hub. The
government requires all men and women to join the Israeli army
and puts the brightest in high-tech
intelligence units such as its famous Unit 8200, where it trains
them on cutting-edge technologies and
encourages them to pursue tech opportunities after their two-
year military service. The businesses of the
country also spend the most per capita on research and
development. Finally, universities in Israel provide
world-class programs, particularly in engineering and
information technology. The combination of these forces
has resulted in an abundance of tech start-ups that have created
significant economic growth.

On the other hand, where governments, industries, or
educational institutions are not supportive and do not
work together, businesses are forced to develop or find
resources on their own, narrowing the margins for
success.
One of the key organizations that can bring firms, universities,
and governments together is a “business
incubator.” A business incubator is a company that helps found
and grow new businesses. It provides new
companies with space, tools, and leadership skills to help
accelerate their early growth. For instance, MIT has
created an organization called the Global Startup Lab (GSL),
which provides resources to undergraduate
students from emerging markets. In addition to providing
resources directly to students, the GSL partners with
institutions such as governments, businesses, and universities in
emerging markets, with the goal of helping
students develop commercial opportunities.
83
84
85
86
87
88
89
90

91
92
93
Question 1
Digital technology infrastructure includes:
17;38
第 3 ⻚⻚（共 4 ⻚⻚）
reserved.
Communication technologies
Internet technologies
All of these
Data technologies
reserved.

Communication technologies
Internet technologies
All of these
Data technologies
17;38
第 4 ⻚⻚（共 4 ⻚⻚）
DOWNLOADABLE eTEXTBOOK PRINTER VERSION
CHAPTER RESOURCES
Reading Content
Introduction
11.1 Technology as
11.2 Technology of
Information
Infrastructure
11.3 Technology of
Summary and Case
ORION: Build your

Proficiency
Videos
Animations
Business Hot Topics
COURSE RESOURCES
Career Center
Business Hot Topics
Videos
Animations
PRACTICE
APPENDIX
Animation: Technology InfrastructureAnimation: Technology
Infrastructure
11.2 Technology of Information Infrastructure
LEARNING OBJECTIVE
Identify the way information infrastructure creates business
opportunities.
UPS estimates that it saves nearly 1 million gallons of gas each
year across North America just by using mapping technology
that
minimizes left turns (drivers turning left risk being delayed by
oncoming traffic). The mapping system has also eliminated
millions of miles
of travel by matching packages, delivery times, and truck

locations in order to optimize routes and maximize delivery
densities.
tracking this data in real time and running complex analytics,
the firm is able to improve efficiency, thereby saving time and
money. Digital
technologies make this possible (see Figure 11.7).
FIGURE 11.7 Assessing the level of information infrastructure
in
countries The information infrastructure consists of
communication
technologies and information technologies such as data storage
and
processing.
In a similar way, the country Estonia uses digital technology to
run many government operations. Estonia began the process of
digitizing
its operations in 1997. The system now enables citizens to
register vehicles, file health insurance claims, and even vote, all
through an
electronic platform called X-Road. The system is so successful
that over 900 agencies—some global, including energy,
telecom, and
banking—offer services through the site. Because of the boost
in efficiency, the platform saves an estimated five days a year
per citizen
by eliminating trips to government offices by both citizens and
businesses, which can access information such as land deeds.
The
efficiency of the system adds 7 million workdays to the
Estonian economy. For instance, in Estonia taxes can be filed
in five minutes
using prefilled, auto-generated reports; by contrast, most
Germans hire tax consultants to help them fill out tax forms and
spend hours on

the process.
Digital infrastructure like the Internet can also help
international businesses improve their communication networks,
data storage, and
information processing, as we'll see next.
Communication Technologies
Changes in communication technologies can dramatically affect
international business opportunities. For example, even in
Brazil's
41
42
DOWNLOADABLE eTEXTBOOK PRINTER VERSION
CHAPTER RESOURCES
Reading Content
Introduction
11.1 Technology as
11.2 Technology of
Information
Infrastructure
11.3 Technology of
Summary and Case
ORION: Build your
Proficiency
Videos
Animations

Business Hot Topics
COURSE RESOURCES
Career Center
Business Hot Topics
Videos
Animations
PRACTICE
APPENDIX
Animation: Technology InfrastructureAnimation: Technology
Infrastructure
11.2 Technology of Information Infrastructure
LEARNING OBJECTIVE
Identify the way information infrastructure creates business
opportunities.
UPS estimates that it saves nearly 1 million gallons of gas each
year across North America just by using mapping technology
that
minimizes left turns (drivers turning left risk being delayed by
oncoming traffic). The mapping system has also eliminated
millions of miles
of travel by matching packages, delivery times, and truck
locations in order to optimize routes and maximize delivery
densities.
tracking this data in real time and running complex analytics,
the firm is able to improve efficiency, thereby saving time and

money. Digital
technologies make this possible (see Figure 11.7).
FIGURE 11.7 Assessing the level of information infrastructure
in
countries The information infrastructure consists of
communication
technologies and information technologies such as data storage
and
processing.
In a similar way, the country Estonia uses digital technology to
run many government operations. Estonia began the process of
digitizing
its operations in 1997. The system now enables citizens to
register vehicles, file health insurance claims, and even vote, all
through an
electronic platform called X-Road. The system is so successful
that over 900 agencies—some global, including energy,
telecom, and
banking—offer services through the site. Because of the boost
in efficiency, the platform saves an estimated five days a year
per citizen
by eliminating trips to government offices by both citizens and
businesses, which can access information such as land deeds.
The
efficiency of the system adds 7 million workdays to the
Estonian economy. For instance, in Estonia taxes can be filed
in five minutes
using prefilled, auto-generated reports; by contrast, most
Germans hire tax consultants to help them fill out tax forms and
spend hours on
the process.
Digital infrastructure like the Internet can also help
international businesses improve their communication networks,

data storage, and
information processing, as we'll see next.
Communication Technologies
Brazil's
41
42
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第 1 ⻚⻚（共 6 ⻚⻚）
Brazil's
poorest favelas (slums), satellite TV and even Internet access
are nearly ubiquitous (Figure 11.8). Because nearly all
consumers have
access to media, international companies like Samsung, LG, and
Apple can market their electronics to global customers.
Companies can
launch products in new markets more quickly and efficiently
when they can harness global media.
FIGURE 11.8 Satellite TV antennae on the houses of
Brazil's poorest neighborhoods
Nearly 43 percent of people on the planet have access to the
Internet. In the OECD countries, mobile broadband is used by
more than

95% of the population. This is 1.27 billion people with access to
the Internet. Japan has the highest level of access to the Internet
of any
country in the world, with close to 150 mobile broadband
subscriptions per 100 people. In other words, almost half of the
Japanese
people have more than one broadband subscription. The
numbers are almost as high in Finland as well (see Figure 11.9
States primarily relies on DSL and cable, whereas in Japan,
fiber-optic networks dominate the country. There are now more
than 7 billion
cellular subscriptions worldwide—that is almost one for every
man, woman, and child alive today—and 95 percent of the
world's
population is covered by a cellular network.
FIGURE 11.9 Mobile Broadband, by country, 2016 Source:
Andrew Burger, February 2017, “OECD Mobile Broadband
Penetration Rises to 95%, Now Reaches 1.2 Billion,”
Telecompetitor. http://www.telecompetitor.com/oecd-mobile-
broadband-penetration-rises-to-95-percent-now-reaches-1-2-
billion/
This statistic highlights the need for international business
managers to understand how such nearly universal connectivity
affects them.
In rural fishing villages in India, for instance, economists
recorded the market price that fishermen received for their daily
catch before
and after the introduction of phones in three separate markets.
Look at Figure 11.10; you can see on the left side of each chart
that the
price of the daily catch varied significantly up and down in each
market. Once phones were introduced in these markets,
fishermen were

43
44
Brazil's
poorest favelas (slums), satellite TV and even Internet access
are nearly ubiquitous (Figure 11.8). Because nearly all
consumers have
access to media, international companies like Samsung, LG, and
Apple can market their electronics to global customers.
Companies can
launch products in new markets more quickly and efficiently
when they can harness global media.
FIGURE 11.8 Satellite TV antennae on the houses of
Brazil's poorest neighborhoods
Nearly 43 percent of people on the planet have access to the
Internet. In the OECD countries, mobile broadband is used by
more than
95% of the population. This is 1.27 billion people with access to
the Internet. Japan has the highest level of access to the Internet
of any
country in the world, with close to 150 mobile broadband
subscriptions per 100 people. In other words, almost half of the
Japanese
people have more than one broadband subscription. The
numbers are almost as high in Finland as well (see Figure 11.9
States primarily relies on DSL and cable, whereas in Japan,
fiber-optic networks dominate the country. There are now more
than 7 billion
cellular subscriptions worldwide—that is almost one for every
man, woman, and child alive today—and 95 percent of the
world's

population is covered by a cellular network.
FIGURE 11.9 Mobile Broadband, by country, 2016 Source:
Andrew Burger, February 2017, “OECD Mobile Broadband
Penetration Rises to 95%, Now Reaches 1.2 Billion,”
Telecompetitor. http://www.telecompetitor.com/oecd-mobile-
broadband-penetration-rises-to-95-percent-now-reaches-1-2-
billion/
This statistic highlights the need for international business
managers to understand how such nearly universal connectivity
affects them.
In rural fishing villages in India, for instance, economists
recorded the market price that fishermen received for their daily
catch before
and after the introduction of phones in three separate markets.
Look at Figure 11.10; you can see on the left side of each chart
that the
fishermen were
43
44
17;38
第 2 ⻚⻚（共 6 ⻚⻚）
fishermen were
able to compare prices efficiently with other fishermen, and

prices quickly converged (notice the large price discrepancies
on the left side
of each chart). That is, prices now varied within a much smaller
range than before, because fishermen were able to verify the
actual
market price. The power of connectivity helped the fishermen
better understand their markets, price their catch properly, and
earn more
money. This study demonstrates an effect that has been
witnessed around the world: when more communication is
available, information
flows more freely, and producers and consumers all benefit.
FIGURE 11.10 The price of fish in rural India before and after
cell phones were
introduced Source: Robert Jensen, “The Digital Provide:
Information (Technology), Market
Performance and Welfare in the South Indian Fisheries Sector,”
Quarterly Journal of Economics 122, no.
3 (2007): 879–924.
Speed of the Internet
Not only is global access to the Internet increasing, but the
speed of the Internet itself is also increasing. As Figure 11.11
the global Internet runs on average at 5.6 Mbps, but in Korea—
which boasts the world's fastest Internet—the average speed is
21.1
Mbps. By contrast, much of Africa has Internet speeds less than
2 Mbps. This discrepancy means that a web page will load ten
times
faster in Korea than in most parts of Africa.
45
46

47
fishermen were
able to compare prices efficiently with other fishermen, and
prices quickly converged (notice the large price discrepancies
on the left side
of each chart). That is, prices now varied within a much smaller
range than before, because fishermen were able to verify the
actual
market price. The power of connectivity helped the fishermen
better understand their markets, price their catch properly, and
earn more
money. This study demonstrates an effect that has been
witnessed around the world: when more communication is
available, information
flows more freely, and producers and consumers all benefit.
FIGURE 11.10 The price of fish in rural India before and after
cell phones were
introduced Source: Robert Jensen, “The Digital Provide:
Information (Technology), Market
Performance and Welfare in the South Indian Fisheries Sector,”
Quarterly Journal of Economics 122, no.
3 (2007): 879–924.
Speed of the Internet
Not only is global access to the Internet increasing, but the
speed of the Internet itself is also increasing. As Figure 11.11
the global Internet runs on average at 5.6 Mbps, but in Korea—
which boasts the world's fastest Internet—the average speed is
21.1
Mbps. By contrast, much of Africa has Internet speeds less than
2 Mbps. This discrepancy means that a web page will load ten
times

faster in Korea than in most parts of Africa.
45
46
47
17;38
第 3 ⻚⻚（共 6 ⻚⻚）
FIGURE 11.11 The speed of the Internet in each country in
2015 Source: “Internet Speeds by Country (Mbps),” Fastmetrics
www.fastmetrics.com/internet-connection-speed-by-country.php
(accessed July 18, 2017).
The implications of Internet speed are more than simple
inconvenience for people who have slower access. Companies
operating in
global markets need to consider the local Internet speed when
designing content for their Internet presence. For example,
embedding a
video testimonial on a website might be effective in Japan,
where download speeds are high, but less effective in India,
where speeds are
slow.
Peer-to-Peer and the Shared Economy
Another significant change stemming from the rise of the digital
infrastructure is the emergence of peer-to-peer (P2P)
transactions in a
virtual marketplace that is sometimes referred to as the “shared
economy.” A shared economy, also called collaborative

consumption or
the peer economy, is a system in which owners rent to strangers
something they are not using, such as a room, a car, or even a
service,
using peer-to-peer services. Constant connectivity and access
saturation have enabled people, especially in industrialized
nations, to
rent their goods and services directly to other people. Hotels,
car rental agencies, and even banks have experienced some
unexpected
competition from the shared economy. For instance, the world's
largest renter of rooms is not technically a hotel; it's the
lodgings broker
Airbnb, which matches individuals willing to rent out space in
their own homes to people who want to rent that space. Airbnb's
online
market for lodgings in private residences boasts over 1.5
million listings around the globe. The average Airbnb host in
New York City
earned more than $5,000 in 2016. But in some markets such as
San Francisco and New York City, the company faces laws that
make
renting out rooms illegal unless the renters register with the
city.
Similarly, Turo, a car-sharing service, enables individuals in the
United States and Canada to rent their cars to others. The
service
matches car owners with prospective renters. Turo then offers
insurance to protect the car owner and detailed reviews to
protect the
renter.
People can even “share” their money now. Those who need
money go to the appropriate P2P site, enter the amount they
would like to

borrow, name the terms, and include details of their
employment, location, and other personal information. Lenders
from around the
globe agree to loan the money at a certain rate. If both parties
agree, the deal is completed and the P2P lender, such as
Bitbond,
Prosper, Upstart, or SoFi, receives a fee between 1 and 5
percent of the loan. The loans can be used to consolidate debt,
buy a car, or
remodel a house.
The P2P phenomenon is not limited to developed markets.
Taobao is a Chinese global market platform similar to eBay,
bringing buyers
and sellers together in both an auction and a fixed-priced model.
The company's site is one of the world's most visited and has
over 7
million sellers posting over a billion products. Taobao is so
large that it represents over 80 percent of online commerce in
China and is
growing quickly abroad. Similarly, Yu'ebau is changing China's
financial industry by paying interest on money left in people's
Taobao
Alipay accounts. Alipay is Taobao's payment system, similar to
PayPal. With a simple click of a button, users can transfer
money from
their online account to an attached savings account, where they
can earn interest. In just 3 years, the service has accumulated
over $60
billion.
Data Storage and Processing Technologies
48
49

50
51
52
53
FIGURE 11.11 The speed of the Internet in each country in
2015 Source: “Internet Speeds by Country (Mbps),” Fastmetrics
www.fastmetrics.com/internet-connection-speed-by-country.php
(accessed July 18, 2017).
The implications of Internet speed are more than simple
inconvenience for people who have slower access. Companies
operating in
global markets need to consider the local Internet speed when
designing content for their Internet presence. For example,
embedding a
video testimonial on a website might be effective in Japan,
where download speeds are high, but less effective in India,
where speeds are
slow.
Peer-to-Peer and the Shared Economy
Another significant change stemming from the rise of the digital
infrastructure is the emergence of peer-to-peer (P2P)
transactions in a
virtual marketplace that is sometimes referred to as the “shared
economy.” A shared economy, also called collaborative
consumption or
the peer economy, is a system in which owners rent to strangers
something they are not using, such as a room, a car, or even a
service,
using peer-to-peer services. Constant connectivity and access

saturation have enabled people, especially in industrialized
nations, to
rent their goods and services directly to other people. Hotels,
car rental agencies, and even banks have experienced some
unexpected
competition from the shared economy. For instance, the world's
largest renter of rooms is not technically a hotel; it's the
lodgings broker
Airbnb, which matches individuals willing to rent out space in
their own homes to people who want to rent that space. Airbnb's
online
market for lodgings in private residences boasts over 1.5
million listings around the globe. The average Airbnb host in
New York City
earned more than $5,000 in 2016. But in some markets such as
San Francisco and New York City, the company faces laws that
make
renting out rooms illegal unless the renters register with the
city.
Similarly, Turo, a car-sharing service, enables individuals in the
United States and Canada to rent their cars to others. The
service
matches car owners with prospective renters. Turo then offers
insurance to protect the car owner and detailed reviews to
protect the
renter.
People can even “share” their money now. Those who need
money go to the appropriate P2P site, enter the amount they
would like to
borrow, name the terms, and include details of their
employment, location, and other personal information. Lenders
from around the
globe agree to loan the money at a certain rate. If both parties
agree, the deal is completed and the P2P lender, such as

Bitbond,
Prosper, Upstart, or SoFi, receives a fee between 1 and 5
percent of the loan. The loans can be used to consolidate debt,
buy a car, or
remodel a house.
The P2P phenomenon is not limited to developed markets.
Taobao is a Chinese global market platform similar to eBay,
bringing buyers
and sellers together in both an auction and a fixed-priced model.
The company's site is one of the world's most visited and has
over 7
million sellers posting over a billion products. Taobao is so
large that it represents over 80 percent of online commerce in
China and is
growing quickly abroad. Similarly, Yu'ebau is changing China's
financial industry by paying interest on money left in people's
Taobao
Alipay accounts. Alipay is Taobao's payment system, similar to
PayPal. With a simple click of a button, users can transfer
money from
their online account to an attached savings account, where they
can earn interest. In just 3 years, the service has accumulated
over $60
billion.
48
49
50
51

52
53
17;38
第 4 ⻚⻚（共 6 ⻚⻚）
Data Storage
The Rise of Global Data Centers
Increased Processing Power
Access to Data
In addition to the explosion of information that is dramatically
affecting international business opportunities, the cost of
gathering and
using information has decreased dramatically. As a result, the
store of global data has increased exponentially.
Thirty years ago, computer systems like the Atari 1040ST
helped bring about the personal computing revolution. The
Atari was a wonder of its time and could store up to 360
kilobytes of data. Today, most users don't even know how much
storage their
computers have—the amount is so large it is almost irrelevant.
Such large data stores are the result of the cost of data storage
decreasing exponentially over the past sixty years. In 1960, one
megabyte of data storage, enough to store about 870 pages of
plain
text, costed about $4,000. In 1994 the cost had fallen to $1, and

by 2010 it was a mere thousandth of a cent.
For international businesses, this means that data about
customers, inventory, suppliers, and everything else can and
does grow at an
exponential rate. The BBC estimates that about 2.5 exabytes, or
2.5 billion gigabytes, are created every day; that's the
equivalent of 960
trillion pages of plain text. Experts estimate that 40 zettabytes
(40 trillion gigabytes) of data will have been created by 2020.
Companies are bursting with data, and many are using it to
improve operations and interactions. For instance, Shell Oil
Company now
integrates millions of observations obtained when its crews are
looking for oil and gas to determine how much is present and
how easy
recovering it will likely be.
However, this explosion of information has challenges of its
own. As economist Herbert Simon predicted over fifty years
ago, global
leaders today face a hard limit on their ability to use all
available data. Simon noted, “In an information-rich world, the
wealth of
information means a dearth of something else: a scarcity of
whatever it is that information consumes. What information
consumes is
rather obvious: it consumes the attention of its recipients.
Hence, a wealth of information creates a poverty of attention
and a need to
allocate that attention efficiently among the overabundance of
information sources that might consume it.” This information
explosion
has global leaders feeling overloaded in a flood of information.
Indeed this problem affects not only leaders of organizations; a
2015

study by Fortune found that 65–76 percent of companies
struggle with employees who feel overwhelmed.
With the creation of so much data, global companies have
emerged to help companies securely
store their data either on-site, in remote data centers, or in
“cloud-based” storage options. For instance, Interxion is a pan-
European data
storage company with 42 data centers in 12 countries. Its
nondescript London location is tucked away in the remains of an
old brewery.
But inside is a state-of-the-art, high-security data center
conveniently close to London's financial companies. These
firms could save
money by using a center outside London rather than one right in
the heart of the city, but the milliseconds required to send and
retrieve
the data from a more distant location would slow the time-
sensitive trades they make. As the pace of business increases,
even the
smallest fraction of a second can mean the creation or loss of a
fortune.
As the cost of data storage has been reduced, the importance of
the ability to process data has
increased. In 1965, Gordon Moore, a cofounder of Intel,
suggested that processing power—measured by the number of
transistors that
amplify or switch signals and electrical power on a microchip—
would double every 24 months. This prediction has become
known as
Moore's law, and so far it has proven to be largely true.
Processing power has increased by 3,500 times over the past
fifty years, even
as the cost has come down.

Energy use in microchips is 90,000 times more efficient today
than in 1965, and the price per transistor has decreased by a
factor of
60,000 over the same period. While these improvements have
fueled many innovations—such as smartphones and tablets—
some
argue that the trend predicted by Moore's law has reached its
limit. Horst Simon, the deputy director of Lawrence Berkeley
National
Laboratory, is among those who say our need for computing
power may have plateaued. As a result, while Intel has led the
pack in
driving innovation, companies in Taiwan, Korea, and China are
capturing an increasingly large share of the memory chip market
by
producing chips that are cheaper because they are sufficient for
most purposes.
Another major hurdle for international business today is
ensuring access to critical data. In the past, companies kept
their own data on site in order to maintain integrity and
security. However, keeping data in-house makes it more
difficult for an
increasingly mobile workforce to access. For that reason,
companies are moving to cloud-based solutions.
In the United States, Amazon, Google, Microsoft, and others
offer cloud-based hosting for data from hundreds of global
companies via
remote data centers with more than a million servers to handle
the flow of the data. Spotify, the Swedish music streaming
company,
uses Google to host its music streaming services. Netflix uses
Amazon's twelve regions to stream films to global markets.
important advantage for global business is that cloud-based
solutions enable companies to quickly take their electronic

content global.
For instance, Amazon has existing infrastructure in the United
States, Canada, Brazil, the European Union, India, Singapore,
Australia,
China, Korea, and Japan. The company's services span thirty-
five of the world's thirty-eight time zones. Thanks to cloud-
based
applications, Amazon's data centers in India can host the same
business processes as those in the United States.
Despite the availability of data, a persistent challenge faced by
global firms is sharing knowledge across country boundaries.
Global
54
55
57
58
59
60
61
62
63
64
65

66
67
69
Data Storage
The Rise of Global Data Centers
Increased Processing Power
Access to Data
In addition to the explosion of information that is dramatically
affecting international business opportunities, the cost of
gathering and
using information has decreased dramatically. As a result, the
store of global data has increased exponentially.
Thirty years ago, computer systems like the Atari 1040ST
helped bring about the personal computing revolution. The
Atari was a wonder of its time and could store up to 360
kilobytes of data. Today, most users don't even know how much
storage their
computers have—the amount is so large it is almost irrelevant.
Such large data stores are the result of the cost of data storage
decreasing exponentially over the past sixty years. In 1960, one
megabyte of data storage, enough to store about 870 pages of
plain
text, costed about $4,000. In 1994 the cost had fallen to $1, and
by 2010 it was a mere thousandth of a cent.
For international businesses, this means that data about
customers, inventory, suppliers, and everything else can and

does grow at an
exponential rate. The BBC estimates that about 2.5 exabytes, or
2.5 billion gigabytes, are created every day; that's the
equivalent of 960
trillion pages of plain text. Experts estimate that 40 zettabytes
(40 trillion gigabytes) of data will have been created by 2020.
Companies are bursting with data, and many are using it to
improve operations and interactions. For instance, Shell Oil
Company now
integrates millions of observations obtained when its crews are
looking for oil and gas to determine how much is present and
how easy
recovering it will likely be.
However, this explosion of information has challenges of its
own. As economist Herbert Simon predicted over fifty years
ago, global
leaders today face a hard limit on their ability to use all
available data. Simon noted, “In an information-rich world, the
wealth of
information means a dearth of something else: a scarcity of
whatever it is that information consumes. What information
consumes is
rather obvious: it consumes the attention of its recipients.
Hence, a wealth of information creates a poverty of attention
and a need to
allocate that …
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CHAPTER RESOURCES

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Introduction
11.1 Technology as
11.2 Technology of
Information
Infrastructure
11.3 Technology of
Summary and Case
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PRACTICE
APPENDIX
11.1 Technology as Physical Infrastructure
LEARNING OBJECTIVE

Assess the impact of physical infrastructure on international
business opportunities
Beginning with the inventions of the wheel, irrigation, and
writing, technological improvements have been responsible for
countless changes to the
way we live and trade. For global business leaders, knowing
how to understand, evaluate, and harness technological trends at
the global and country
levels is an increasingly important skill. In this chapter, we
introduce a framework to help you understand the impact of
technology and technological
changes on the global enterprise and how global leaders can
capitalize on these opportunities. This framework consists of
physical infrastructure,
information infrastructure, and human infrastructure (see Figure
11.1).
FIGURE 11.1 Assessing the level of physical
infrastructure Physical Infrastructure includes raw materials,
manufacturing equipment, transportation networks, and energy
resources.
International businesses must consider an important factor: the
level of physical infrastructure present in a given country.
Countries with low levels of
physical infrastructure may be less attractive to international
businesses because producing and distributing goods and
services are often difficult.
Countries with high levels of physical infrastructure, however,
present fewer challenges for international businesses.
The physical infrastructure includes elements such as the
availability of raw materials like plastics, metals, and minerals;
the availability of machinery
and equipment like weaving looms for textiles, precision

weighing and mixing equipment for pharmaceuticals, and metal
stamping and welding
equipment for automobiles; transportation networks that enable
goods to move between producers and customers; and the
energy resources that
provide power to producers and consumers alike. Key questions
for assessing the physical infrastructure are shown in Figure
For instance, when Hindustan Unilever—a global seller of
soaps, shampoos, and lotions—sought to move from urban cities
to rural towns in India, it
quickly recognized a problem. Competition was fierce in urban
India, but while the country had over a billion potential
customers, getting products to
the half who lived in rural villages would be exceptionally
challenging because of the country's undeveloped physical
infrastructure. The lack of roads
made transportation burdensome, the very small number of large
retail stores made distribution channels difficult to establish,
and a general lack of
information made monitoring the distribution process nearly
impossible.
In assessing the physical infrastructure of a market, global
leaders need to consider a host of factors, including access to
raw materials,
manufacturing capabilities and techniques, transportation
networks, and energy resources.
Raw Materials
4
DOWNLOADABLE eTEXTBOOK
CHAPTER RESOURCES

weighing and mixing equipment for pharmaceuticals, and metal
stamping and welding
equipment for automobiles; transportation networks that enable
goods to move between producers and customers; and the
energy resources that
provide power to producers and consumers alike. Key questions
for assessing the physical infrastructure are shown in Figure
For instance, when Hindustan Unilever—a global seller of
soaps, shampoos, and lotions—sought to move from urban cities
to rural towns in India, it
quickly recognized a problem. Competition was fierce in urban
India, but while the country had over a billion potential
customers, getting products to
the half who lived in rural villages would be exceptionally
challenging because of the country's undeveloped physical
infrastructure. The lack of roads
made transportation burdensome, the very small number of large
retail stores made distribution channels difficult to establish,
and a general lack of
information made monitoring the distribution process nearly
impossible.
In assessing the physical infrastructure of a market, global
leaders need to consider a host of factors, including access to
raw materials,
manufacturing capabilities and techniques, transportation
networks, and energy resources.
Raw Materials
4
17;38
第 1 ⻚⻚（共 6 ⻚⻚）

Ships
Raw Materials
Raw materials are the basic materials from which goods and
components of goods are made. While many raw materials are
abundant around the
globe—such as the elements oxygen, silicone, aluminum, and
iron—others are rare enough that companies' needs for them can
influence global
business decisions. For instance, many of today's batteries are
lithium-ion batteries. Bolivia and Chile control nearly half the
world's supply of lithium.
This means foreign companies may struggle to gain access to an
ample supply. They may not need to move to Chile or Bolivia,
but managers of
international companies should certainly build healthy trade
relationships with Chilean and Bolivian suppliers and
governmental officials.
Often, governments will use access to raw materials as a source
of advantage for their domestic companies. For instance, a
RAND Corporation
report suggests that China, which controls nearly 90 percent of
the world's rare earth elements, charges global electronics firms
much higher prices
than what domestic Chinese competitors pay for rare earth
elements such as lanthanum and cerium, which are often used in
electronics (see
11.1). As a result, Chinese electronics firms may have a
significant cost advantage in addition to preferred access to
critical elements. In addition,
China's near monopoly has forced other countries to develop
alternative approaches that work around the requirements for

some elements. For
instance, when China cut off sales of rare earth elements to
Japan in 2010 during a spat over the fate of Chinese fishermen
who were caught fishing
in Japanese waters, Japan, among other nations, began seriously
investing in finding alternative materials that could substitute
for rare earth metals.
TA B L E 11 . 1 China's Two-Tiered Pricing of Rare Earth
Elements
Material International Prices (USD/kg) Chinese Domestic Prices
(USD/kg)
Lanthanum 66.46 18.28
Cerium 59.31 20.65
Neodymium 244.23 122.76
Praseodymium 209.62 106.94
Samarium 95.31 14.48
Dysprosium 2032.31 1085.35
Europium 3800.00 2228.38
Terbium 2973.85 1767.93
Source: Richard Silberglitt et al., “Critical Materials: Present
Danger to U.S. Manufacturing,” RAND National Defense
Research Institute,
www.rand.org/content/dam/rand/pubs/research_reports/RR100/
RR133/RAND_RR133.pdf.

Manufacturing Equipment
In the past decade, the advances of new manufacturing
equipment and techniques have changed many global industries.
For instance, horizontal
drilling allows vertical wells to twist and turn horizontally for
over a mile underground. Coupled with hydraulic fracturing (in
which a high-pressure
solution is pumped into a well to crack the rock and release
nearby pockets of hydrocarbons), this technique has increased
production of natural gas
from shale gas to more than eight times the rate of any earlier
technologies. This capability reduces the bargaining power of
OPEC producers,
significantly altering the global oil and gas industry. This is just
one example of how new technologies can overturn commonly
held beliefs in any
sector, even manufacturing.
Another manufacturing innovation with a dramatic impact on
global business is the creation of global manufacturing clusters,
suppliers and producers of a given industry in the same
geographic location. This proximity facilitates the free flow of
ideas, people, and resources
between firms and for well-designed hubs often results in global
dominance. For instance, in Silicon Valley, tech firms cluster
together, attracting
talent, investors, and ideas from around the world. Similarly,
Italy is the world's center for leather craft and high-end
automobiles.
center of the fashion industry. South Africa is the center of the
world's mining industries. China is the center of the world's
garment industry.
rules exist that require new businesses to locate near the
existing ones in their industry, but new entrants are still likely
to benefit from proximity to
them.

Transportation Networks
Transportation technologies play a vital role in the success of
international businesses. Transportation, whether between
production facilities or from
supplier to customer, relies on a network that links shipping,
air, rail, and road; in the not-too-distant future it may even
include delivery drones.
Perhaps the most important technological advancement in the
transportation industry in the past twenty years has been the
invention of the
6
7
9
11
12 13
Ships
Raw Materials
Raw materials are the basic materials from which goods and
components of goods are made. While many raw materials are
abundant around the
globe—such as the elements oxygen, silicone, aluminum, and
iron—others are rare enough that companies' needs for them can
influence global
business decisions. For instance, many of today's batteries are
lithium-ion batteries. Bolivia and Chile control nearly half the
world's supply of lithium.
This means foreign companies may struggle to gain access to an

ample supply. They may not need to move to Chile or Bolivia,
but managers of
international companies should certainly build healthy trade
relationships with Chilean and Bolivian suppliers and
governmental officials.
Often, governments will use access to raw materials as a source
of advantage for their domestic companies. For instance, a
RAND Corporation
report suggests that China, which controls nearly 90 percent of
the world's rare earth elements, charges global electronics firms
much higher prices
than what domestic Chinese competitors pay for rare earth
elements such as lanthanum and cerium, which are often used in
electronics (see
11.1). As a result, Chinese electronics firms may have a
significant cost advantage in addition to preferred access to
critical elements. In addition,
China's near monopoly has forced other countries to develop
alternative approaches that work around the requirements for
some elements. For
instance, when China cut off sales of rare earth elements to
Japan in 2010 during a spat over the fate of Chinese fishermen
who were caught fishing
in Japanese waters, Japan, among other nations, began seriously
investing in finding alternative materials that could substitute
for rare earth metals.
TA B L E 11 . 1 China's Two-Tiered Pricing of Rare Earth
Elements
Material International Prices (USD/kg) Chinese Domestic Prices
(USD/kg)
Lanthanum 66.46 18.28

Cerium 59.31 20.65
Neodymium 244.23 122.76
Praseodymium 209.62 106.94
Samarium 95.31 14.48
Dysprosium 2032.31 1085.35
Europium 3800.00 2228.38
Terbium 2973.85 1767.93
Source: Richard Silberglitt et al., “Critical Materials: Present
Danger to U.S. Manufacturing,” RAND National Defense
Research Institute,
www.rand.org/content/dam/rand/pubs/research_reports/RR100/
RR133/RAND_RR133.pdf.
Manufacturing Equipment
In the past decade, the advances of new manufacturing
equipment and techniques have changed many global industries.
For instance, horizontal
drilling allows vertical wells to twist and turn horizontally for
over a mile underground. Coupled with hydraulic fracturing (in
which a high-pressure
solution is pumped into a well to crack the rock and release
nearby pockets of hydrocarbons), this technique has increased
production of natural gas
from shale gas to more than eight times the rate of any earlier
technologies. This capability reduces the bargaining power of
OPEC producers,
significantly altering the global oil and gas industry. This is just
one example of how new technologies can overturn commonly
held beliefs in any

sector, even manufacturing.
Another manufacturing innovation with a dramatic impact on
global business is the creation of global manufacturing clusters,
suppliers and producers of a given industry in the same
geographic location. This proximity facilitates the free flow of
ideas, people, and resources
between firms and for well-designed hubs often results in global
dominance. For instance, in Silicon Valley, tech firms cluster
together, attracting
talent, investors, and ideas from around the world. Similarly,
Italy is the world's center for leather craft and high-end
automobiles.
center of the fashion industry. South Africa is the center of the
world's mining industries. China is the center of the world's
garment industry.
rules exist that require new businesses to locate near the
existing ones in their industry, but new entrants are still likely
to benefit from proximity to
them.
Transportation Networks
Transportation technologies play a vital role in the success of
international businesses. Transportation, whether between
production facilities or from
supplier to customer, relies on a network that links shipping,
air, rail, and road; in the not-too-distant future it may even
include delivery drones.
invention of the
6
7

9
11
12 13
17;38
第 2 ⻚⻚（共 6 ⻚⻚）
Sea Ports and Canals.
Ships
Air Transport
invention of the
standardized shipping container. With ports, shippers, and
transportation companies all agreeing to standard twenty-foot
and forty-foot designs,
ships, trains, and trucks can be loaded and unloaded quickly
using standardized equipment.
Maersk Line is the world's largest transporter of shipping
containers today. It ships goods to and from 115 countries using
600 container vessels. That
may not seem like much, but container ships are huge. In 2014,
the company introduced the Triple-E (Figure 11.2), the world's
largest container
ship, which carries 18,000 shipping containers. To put that in
perspective, if those containers were lined up end to end, they

would stretch for sixty
miles. Standardization of shipping containers has enabled this
kind of specialized ship, which in turn has increased efficiency
and reduced costs in
the shipping industry.
FIGURE 11.2 Maersk's Triple-E The world's largest container
ship boasts improved fuel efficiency, reduced emissions, and
enormous size.
Source: Vitron Trading Ltd. 2017. www.vesseltracking.net/wp-
content/uploads/2015/12/final_maersk.jpg
Like ships, ports have grown dramatically to keep pace with the
demands of global shipping. Shanghai, China, is the
world's busiest port, handling the equivalent of more than 15
million forty-foot containers per year. China exports so many
goods that it is responsible
for six of the ten busiest ports in the world. What does this
mean for international businesses? China's investment in
transportation makes it relatively
easy for global firms to manufacture in China and ship to other
markets and for Chinese businesses to export their products
abroad.
Major technological changes have increased the safety and
efficiency of air transportation and air travel; these changes
have led to
reductions in their cost. The World Bank estimates that the
number of air passengers worldwide has increased from around
300,000 per year in
1970 to over 3.4 billion per year in 2015, equating to more than
6 billion passenger-kilometers, or the number of kilometers
flown multiplied by the
number of passengers on the planes. The relative ease of travel
has increased foreign business travel and foreign vacations, but
perhaps more

important, it has also increased the ease of shipping goods as air
cargo (see Figure 11.3). With the rise of several global e-
commerce sites like
Alibaba.com and Amazon.com, international air cargo is set to
grow quickly because nearly a third of all e-commerce is from
foreign customers who
buy goods abroad and have them shipped to their home market.
16
17
18
19
20
22
23
24
25
Sea Ports and Canals.
Ships
Air Transport
invention of the
standardized shipping container. With ports, shippers, and

transportation companies all agreeing to standard twenty-foot
and forty-foot designs,
ships, trains, and trucks can be loaded and unloaded quickly
using standardized equipment.
Maersk Line is the world's largest transporter of shipping
containers today. It ships goods to and from 115 countries using
600 container vessels. That
may not seem like much, but container ships are huge. In 2014,
the company introduced the Triple-E (Figure 11.2), the world's
largest container
ship, which carries 18,000 shipping containers. To put that in
perspective, if those containers were lined up end to end, they
would stretch for sixty
miles. Standardization of shipping containers has enabled this
kind of specialized ship, which in turn has increased efficiency
and reduced costs in
the shipping industry.
FIGURE 11.2 Maersk's Triple-E The world's largest container
ship boasts improved fuel efficiency, reduced emissions, and
enormous size.
Source: Vitron Trading Ltd. 2017. www.vesseltracking.net/wp-
content/uploads/2015/12/final_maersk.jpg
Like ships, ports have grown dramatically to keep pace with the
demands of global shipping. Shanghai, China, is the
world's busiest port, handling the equivalent of more than 15
million forty-foot containers per year. China exports so many
goods that it is responsible
for six of the ten busiest ports in the world. What does this
mean for international businesses? China's investment in
transportation makes it relatively
easy for global firms to manufacture in China and ship to other
markets and for Chinese businesses to export their products
abroad.

Major technological changes have increased the safety and
efficiency of air transportation and air travel; these changes
have led to
reductions in their cost. The World Bank estimates that the
number of air passengers worldwide has increased from around
300,000 per year in
1970 to over 3.4 billion per year in 2015, equating to more than
6 billion passenger-kilometers, or the number of kilometers
flown multiplied by the
number of passengers on the planes. The relative ease of travel
has increased foreign business travel and foreign vacations, but
perhaps more
important, it has also increased the ease of shipping goods as air
cargo (see Figure 11.3). With the rise of several global e-
commerce sites like
Alibaba.com and Amazon.com, international air cargo is set to
grow quickly because nearly a third of all e-commerce is from
foreign customers who
buy goods abroad and have them shipped to their home market.
16
17
18
19
20
22
23
24

25
17;38
第 3 ⻚⻚（共 6 ⻚⻚）
Rail and Roads
FIGURE 11.3 The rapid growth of air travel and air cargo from
1975 to 2014 Source:
Franziska Kupfer et al., “The Underlying Drivers and Future
Development of Air Cargo,”
Journal of Air Transport Management 61 (June 2017): 6–14,
www.sciencedirect.com/science/article/pii/S0969699715301678.
Shipping by sea is cheap but slow and limited to coastal ports.
Air freight is fast but expensive and limited to regions with
established airports. Ground transportation bridges the gap
between the two: trucks and trains take the containers shipped
over the oceans and
move them inland, where much of the world's population lives.
In addition, many overland routes exist between countries like
Mexico and the United
States or Germany and Turkey, and these are best traveled by
truck and/or train.
Overall, the combination of improvements in shipping, ports,
air, rail, and roads has made much of the world more easily and
quickly accessible. As
Figure 11.4 shows, a few areas are still remote—like the Arctic
tundra, the Amazon basin, the Sahara, the Tibetan plateau,
Antarctica, and Siberia—
but thanks to advanced physical infrastructure, it is fairly easy

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