Text 1-2. GLOBAL ECONOMY

(Based on David Graddol’s English Next. Why global English may mean the end of English as a Foreign Language)

1. If asked why everyone seems interested in learning English, it is tempting to reply that it’s primarily because of the economy. This section describes the major trends in the global economy now affecting the demand for English and other languages. Before the 19th century, India and China were the world’s economic superpowers. Thanks to their new economic rise, they will soon regain their former status – and our perceptions of the relative importance of world languages may also change.

Economic relationships between the developed countries and those of the ‘third world’ are changing. Indian and Chinese economies, especially, have been growing fast. According to the OECD, China could overtake the USA and Germany to become the largest exporter in the world in the next 5 years. In December 2005, China revised its estimations of economic growth, showing that it had already overtaken Italy in GDP and was likely to become the world’s fourth largest, overtaking the UK, by the end of 2006. China’s services sector was particularly underestimated and probably already accounts for over 40% of its GDP.

Services are of linguistic interest since they often require much higher levels of communication than manufacturing. Exported services – which include receiving international students and tourists – often require international communication.

2. The world economy is experiencing the impact of two new economic superpowers emerging simultaneously. But it is not just China and India whose economies are growing fast. Together with Brazil and Russia they form a group referred to by economists as BRICs. An analysis in 2003 by Goldman Sachs estimated what the combined impact would be on the world economy of this emergent group:

If things go right, in less than 40 years, the BRICs economies together could be larger than the G6 in US dollar terms. By 2025 they could account for over half the size of the G6. Currently they are worth less than 15%. (Wilson & Purushothaman, 2003)

This prediction may even be conservative, given the recent revision upwards of China’s growth. In January 2006, The Economist reported:

Since their industrial revolutions in the 19^th century, the rich countries of the ‘first world’ have dominated the global economy. By one measure at least, that era may be over. According to estimates by The Economist, in 2005 the combined output of emerging (or developing) economies rose above half of the global total.

3. In January 2006, the Worldwatch Institute, a US think-tank, warned that India and China are ‘planetary powers that are shaping the global biosphere’ who, if they were to consume as much per capita as Japan, would ‘require a full planet Earth to meet their needs’ (State of the World, 2006).

Many are fearful of the political consequences of such a global shift of economic power. Others welcome the growth of both countries and the contribution to the global economy which they will make. But whether the trend is welcome or not, a commentary in the Financial Times by Martin Wolf captures the feeling of many economic analysts:

The economic rise of Asia’s giants is . . . the most important story of our age. It heralds the end, in the not too distant future, of as much as five centuries of domination by the Europeans and their colonial offshoots.

China may play down any imperial ambitions, but it is a country with immense self-confidence and sense of destiny and is able to play a long game. Chinese enterprises are quietly acquiring a controlling interest in key global resources. Its concept of ‘peaceful rising’ is the answer to US ‘soft power’ in Latin America, the Caribbean, Africa, and Central Asia, weaving together economic, diplomatic, political and cultural strategies. China’s huge investment in English, together with its promotion of Mandarin as a foreign language, must be seen in this global context.

4. Many services are now outsourced, in the same way as the manufacture of computers or t-shirts. Such business process outsourcing (BPO) and information technology outsourcing (ITO) are not a new phenomenon. Many operations such as company payroll or specialist computer data processing, have been subcontracted by companies to specialised bureaux since the 1960s. What has changed is the huge range of services which are now affected, and the fact that cheap communications allow many of them to be carried out in distant locations. The trend is now clear: if there is any fraction of a service which can be separated from a physical location and done more cheaply somewhere else, it will be outsourced (see panel, right).

Call centres, in which service calls from members of the public are picked up in a distant country such as India, have attracted much public attention – and even led some companies to advertise the fact they are relocating call centres ‘back home’. However, call centres account for a small percentage of the BPO market. According to the OECD, close to 20% of total employment in the 15 pre-expansion EU countries, America, Canada and Australia, could ‘potentially be affected’ by the international sourcing of services activities (Economist, 30 June 2005).

5. One of the most notable features of globalisation has been the outsourcing of services to countries with cheaper labour costs. Global English has helped accelerate this phenomenon and give India a competitive edge.

English is so desirable in the outsourcing business because most of the offshore contracts come from English-speaking corporations. When customers in some branches of McDonald’s restaurants in the USA place orders for fast food, they speak to a call centre hundreds of miles away, who pass back the order, together with a digital photo of the customer, to the kitchen. This approach is marginally cheaper for the restaurant per transaction but it apparently can make the process 30 seconds faster, allowing more burgers to be sold per hour, with fewer mistakes. (The World is Flat, Friedman, 2005)

Each day at 4.30 am 20 well-educated Indians start work in their call centre in Kerala, India. They provide one-to-one tutorial help in subjects such as maths and science to Californian schoolchildren. One recent estimate suggests that over 20,000 American schoolchildren now receive e-tutoring support from India, usually through US service providers. (Christian Science Monitor, 23 May 2005)

6. Competitive advantage in the fast-moving BPO market is soon lost, forcing service providers up the ‘value chain’ towards work that requires greater skills and knowledge. This has led to an educational ‘arms race’.

Each country maintains its competitive advantage as a destination for outsourcing only for a relatively short time.

As investment pours into the country, and demand for labour rises, so inevitably do wage and property costs. Taiwan, Singapore, Malaysia and Hong Kong all used to be favourite places for the manufacture of computer parts but much of the business has now shifted to mainland China.

In January 2006 India confirmed its own aspirations to become a ‘global knowledge hub’. India is rapidly moving beyond call centres and back offices to provide services that involve specialised knowledge which require research skills and the exercise of professional judgement. Some analysts have named this development as ‘KPO’ (knowledge process outsourcing). Where BPO requires graduates, KPO employs PhDs. The new areas of high-value work in India include medical and legal research, nanotechnology and space research, patent applications, pharmaceutical clinical trials, medical tourism, film post-production, and financial and market analysis.

7. When ABB – a Swiss–Swedish multinational company specialising in power management and automation equipment – announced in September 2005 that it is setting up a robotics division in Shanghai and shifting its high-end engineering research to Bangalore, it was following a now familiar path. As national education systems create suitable employees, transnational corporations (TNCs) are shifting their research and development centres to developing countries. In the 1990s, the dominant model was for high-value activities such as design and basic research to remain in developed countries, whilst product development and manufacturing was located in lower wage areas. The new model shifts high value as well as manufacturing to countries such as India and China bringing increased levels of foreign direct investment (FDI).

R&D (Research and Development) is among the highest value-added activities undertaken by firms. Its internationalization affects the allocation of knowledge and human resources across countries and creates links between domestic actors and the R&D activities of TNCs. It deepens technology transfer– from simply transferring the results of innovation to transferring the innovation process itself. (UNCTAD – United Nations Conference on Trade and Development, 2005)

Everywhere, in both developed and developing economies, there is a new urgency to increase the educational level of the workforce to maintain a country’s competitive advantage as it loses advantage in less skilled areas to countries lower in the development chain. From Norway to Singapore, governments are keen to enhance critical thinking and creativity in their populations.

8. The economic dominance of western economies which has existed since the industrial revolution is coming to an end.

The services sector, including BPO, will provide an increasing proportion of national economies. English is of particular value, at present, in this sector, though the value of other languages in outsourcing is growing.

As many countries enter an ‘educational arms race’ in order to maintain international competitiveness, high-value intellectual work – including basic science research – is beginning to move to countries like India and China.

OVERVIEW QUESTIONS: MAIN IDEA, MAIN TOPIC, AND MAIN PURPOSE OF THE TEXT

Instruction: The SQ3R technique is commonly used to help students get the most from their reading. SQ3R means Survey, Question, Read, Recite, and Review. Students are asked to complete these five activities:

1) to survey; looking over headings, reading introductory and concluding paragraphs, and identifying the core ideas of the passage.

2) to formulate questions from text headings.

3) to make a conscious effort to find the answers in the text as they read.

4) having read the first section, to look away from the book and try to recite the answers to their questions, using their own words and trying to give an example.

5) to take notes, and, when they have finished reading, to review their notes.

Training in this procedure will help students to read more efficiently.

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Section 1. Guidelines for intensive reading of ESP texts	\|	Matching headings with paragraphs

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