“The proliferation of high-speed fiber-optic cables and the commercialization of the internet in the 1990s enabled corporations to divide their operations globally. Design work could happen in California, assembly could take place in Mexican or Chinese factories, and back-office administrative tasks could be handled by workers in India. This modular global network accelerated the velocity of capital and transformed corporate organization.”
Which of the following was a major economic consequence in the United States of the developments described in the passage?
- The rapid expansion of a knowledge-based service sector alongside the deindustrialization of traditional manufacturing regions.Answer
- BThe passage of supply-side economic policies that aimed to stimulate growth by expanding federal regulatory oversight of technology companies.
- CA significant increase in the membership and political influence of industrial labor unions in the Rust Belt.
- DThe enactment of isolationist tariff policies that effectively decoupled the United States from global commerce.
Answer
The rapid expansion of a knowledge-based service sector alongside the deindustrialization of traditional manufacturing regions.
The correct answer is correct because the rise of digital networks and computing allowed companies to outsource physical production to regions with lower labor costs. This accelerated the deindustrialization of the United States Rust Belt and shifted the domestic workforce toward knowledge-based service sectors like technology, banking, and professional services.
Step-by-Step Solution
Key Concept
The Shift to a Service and Information Economy