Dell Theory

According to Thomas Friedman, the Dell Theory of Conflict Prevention is a theory he presented in his book The World Is Flat. The theory stipulates: No two countries that are both part of a major global supply chain, like Dell’s, will ever fight a war against each other as long as they are both part of the same global supply chain. I took a History of the 20th Century class last semester and the professor brought up a similar theory where the rise of global IT will decrease the possibility of a global war, like WWI and II, of ever happening again.


When I first heard of this I thought this could not be true. I always figured there was an inevitable WWIII that was bound to happen. Now, I realize that will never happen now. Once every country in the world becomes industrialized, there will be no more world wars. What country would want to go to war with another country that was full of their own businesses? If this were to happen, the global economy as a whole would collapse. An example would be if the US were to attack Japan like they did in 1945. Japan is now full of US-owned businesses and many businesses that thrive because of the US market. If all imports and exports to and from Japan were blocked, the US economy would take a major hit.

This is just another reason why global IT is such a success. However, the Dell Theory is not a guarantee, it means governments of these countries will have very heavy economic costs if they go to war. A real life example of this theory is the China and Taiwan relationship. Both countries have strong supply relations with each other so a war seems very unlikely today.

Globalization and IT

With the development of economic globalization, the widely flow of information technologies double increases the profit of intangible capital and tangible assets .At the same time, people can utmost take advantage of information technologies by gaining higher intangible and tangible assets. For example, to install new software and database can promote its functions. Therefore, no matter tangible assets or intangible assets, either of them can complement each other.

The information technologies totally change our senses of traditional space. We are staying in an Internet Age. In the past time, we spent most of time even several months to search sources and analyze them, but now we just need to click our computer mouse. It is possible achieved that the monitoring and communication appeared in our lives. The technologies give the faster evaluation and relative reaction, which accelerate the total time. The innovation of information technologies shortens the distance of the world. IT impacts on the speed and orientation of economic globalization that it shortens the time of producing products. It stimulates the global vertical specialization and outsourcing. One of the reasons is that it continuously gives the reaction to shorten the lead time. IT leads to reduce the cost of various transactions, which includes the internal management, monitoring and controlling. And it also reduces the cost of cooperation between two companies.

As the result of IT innovation, many services have the potential international transactions such as computer software, design, quality guarantee and entertainment. Therefore, the scope of globalization is broadening. The deduction of the cost of transaction offsets the increased cost of transportation and telecommunication which is brought by the globalization. The globalization cannot leave the technologies.