‘Globalization reflects a concentration of technological power’

The environment has undoubtedly had one of the biggest influences on quality of life. All progress, therefore, must be sustainable in environmental terms. But there is another huge actor that influences quality of life: the economy. All progress must therefore also support economic sustainability.
TU Delft is well known within the academic community for its extensive work on sustainable technology. The university’s work in developing environmentally safe technology has received worldwide acclaim and appreciation. TU Delft is building the next generation of cars and motor vehicles, and discovering the futuristic trends in fuel technology. Every aspect of the students’ technological studies tries to adjust its performance to support the environment. The message to the world is loud and clear: let technological progress support the environment. But how sustainable is our economy today?
On a sunny Monday evening, I met up Karel Mulder, an associate professor at the TPM Faculty, to learn more about the dynamics of economic sustainability and the current situation in the world today.

The primary characteristic of today’s economy is its global nature. But globalization as a term is not clearly defined. What, in your view, is globalization?
“Well, it’s not the economy per se which is global. It’s the technological trade component that is truly international. Let me illustrate this for clarity. In the 1950s, when TV sets were first mass-produced, there were several TV set producers in each European country. But today, there is a small handful of leading TV set producers in the world, predominantly Japanese, European and Chinese. Each has its own division in different countries. And they dominate the market all over the world. The technological know-how is global, but the research is only done specifically in one location. This is globalization.”

Do you believe this globalization is harmless to the economy?
“Globalization essentially reflects a concentration of technological power. This may be good for standardization purposes, for speedy optimization of products and for unification of technology, but in some other respects it may prove to be a trap. Does such undivided control allow for disruptive innovation? After all, disruptive innovations are always the hallmarks of any technological era; they are the milestones we use to gauge progress. Yes, success of technology is unforeseeable and also produces unforeseen applications and successes. So, it has both its pros and cons.”

What are the characteristics of a sustainable economy?“Well, essentially, a sustainable economy has to provide for itself in the long run. Since the nature of the economy of every country is so different, economic sustainability has different meanings for different countries. Take, for example, the island of St. Martin’s in The Netherlands Antilles, which was entirely dependant on tourism. That was the island’s only income. After 9-11 in the US, there were no tourists and the island’s economy completely crashed. So, diverse production, strong environmental rules, and opportunities for the population are the essentials for a sustainable economy.”

Does the EU impose any economic sustainability policies on its member countries?“No specific conditions exist as such. But then, most policies are nation specific. For example, all political parties in Holland submit their fiscal proposal to the Central Planning Bureau, which then calculates the outcome of that policy and gives them an approval seal or feedback. So, there are no laws, but sustainability is the self-evident objective of our economy. Another example is the recent ABN AMRO takeover. The EU does have to agree about such takeovers. The only criterion required is that the takeover does not affect the free market economy. Unfortunately, the takeover was not sustainable, and Fortis, one of the banks taking over ABN AMRO, went into serious debt.”

In a capitalistic economy, interests are vested. And you mention that the policies are nation specific. So each nation can have its own policy.
In this scenario, do you think it’s fair for the US and Europe to put pressure on China to increase the value of the Yuan, as they are doing now? China is entitled to its own policy.
“Well, China has a large share of investment in the US. Also, their products are all over the world, often affecting local markets. These are reasons why so many countries want an appreciation of the Yuan – to sustain their own economy. In the end, at any rate, with the Chinese holdings all over the world, there is bound to be an automatic increase in the Yuan value, so it’s inevitable anyway. The primary need and the inevitable end result here, as well as for the sustainable economy, is that the buying power of all currencies be the same.”

During a meeting in Rotterdam representatives of leading chemical companies from Germany, France and the Netherlands have given the go-ahead to the establishment of the European Process Intensification Center (EUROPIC). The Center, with headquarters at TU Delft and two regional offices in Dortmund and Toulouse, is intended as an industry-driven platform for knowledge and technology transfer in the field of Process Intensification.