The extent to which economic activity generates wealth depends on the efficiency of both production and exchange. Improvements in production have depended directly on technological advances. The Industrial Revolution, which first stirred in England in the middle of the eighteenth century, was propelled by significant innovations in spinning and weaving technology, followed by major developments in transport (railways) and other industries which benefited from the application of steam technology. Rapid advances in information and communications technology over the past two decades are said to be ushering in a new Industrial Revolution, a knowledge-based society whose ultimate character is still the subject of much speculation.
But economic development depends in no small measure on the scope for exchange. The Industrial Revolution was bolstered by the opening up of world markets for textiles and other manufactured goods. Markets for a wide range of commodities proliferated, with London claiming the lion's share by virtue of its status as trading capital of the world. In addition, financial services were increasing in sophistication, allowing the mobilization of vast amounts of capital across continents. The 1990s witnessed numerous additions to the vocabulary of business. Two of the more important additions that transcend jargon and slang are the concept of the "virtual corporation" and one of its integral components "outsourcing." The creation of these new dictionary entries represents a fundamental change in the workplace as we know it and a transformation of the American corporate structure.
At the core of this transformation is the advent of the virtual corporation. This new organizational structure is characterized as a legal-financial entity whose physical plant is scattered across the globe and whose people-parts are almost as interchangeable as chips in a motherboard. The ties that bind corporations to people and places are increasingly seen as tentative, temporary, and optional................
