The Local Voices of Globalization

Global growth has to work within existing social structures. How do we drive ongoing innovation while respecting those social needs?

 |  Transcript [PDF]

“How do we make the new things that we need for innovation and for long-term development? How do we put that on top of what’s already there?”

These are important questions that business economics researcher Daniel Trefler asks in his research in globalization and innovation.

To innovate, we need to build. But all of this has to happen within a framework that considers all the context of the social and physical structures that are already in place. Institutions cover a wide host of organizations that make these decisions, whether it’s big capital projects like building a dam, or reforming existing educational systems.

Trefler, a fellow at the Canadian Institute for Advanced Research, focuses on international trade and its impact on domestic institutions, and how all of this impacts innovation.

In this context, the management of globalization is critical. Free trade agreements expand the size of markets in which countries can operate, providing incentives for innovation. Trefler’s research has shown that the single largest gain from international trade has been in the adoption of new technologies when larger markets are available to support them.

However, while promoting change, it’s important for institutions to give a voice to local people who will be most affected by the ultimate decisions, says Trefler.

“International trade could actually affect governance structures, and that would have long-term impacts on how people perceive their voice in society and their satisfaction with their society,” explains Trefler.

In other words, global decisions should never be made without considering local voices. Working seamlessly across both scales, innovation and society can drive each other in the right direction.

‹ Previous post
Next post ›

Daniel Trefler is the Research Fellow both at the Canadian Institute for Advanced Research and at the National Bureau of Economic Research. He is co-editor of the Journal of International Economics and the Journal of Economic Literature, and recipient of numerous awards, including the Canadian Economics Association’s Innis Award and the McDonald Award for contributions to early childhood advocacy. Daniel’s research centers on the impact of international trade on innovation, employment, earnings and domestic institutions. His current research focuses on domestic and international levers for promoting competitiveness and broad-based prosperity.