In the field of world economy and globalization, technology was often seen by some skeptics as a divergence mechanism that accentuated differences between developed countries and emerging economies.Visit this site to know about white label fintech.
In fact, in some economic sectors this trend occurs, so that inequality between regions increases. It is common to find examples in sectors such as industrial. Developed countries have the necessary infrastructure and technology to transform raw materials into processed products, while less developed countries in many cases have raw materials, but not the technology to transform them into final products; not at least, of its own technology. It is likely that multinationals will make a “barrier jump” and locate their factories directly in the place where they obtain raw materials, making vertical integration and saving on costs, benefiting from the phenomenon of outsourcing.Click here to know about white label fintech.
In these cases, less developed countries sell raw materials and have to buy the processed product at a much more expensive price, so the balance of the trade balance of exports and imports is often negative for less developed countries.
Fintech can be a solution to reduce inequality
This idea has had a deep draft among the most critical of globalization. However, given the possible disadvantages that we find in the more traditional economic sectors, technology has allowed a convergence movement between less developed and more developed countries. The FinTech as a mechanism to reduce inequality the advantage of the FinTech sector is that its technology is global.
IT growth in emerging countries
With the increase in the Internet penetration rate and the appearance of FinTech startups and 100% digital banks, the number of people with access to financing has experienced exponential growth, which has led to an increase in economic activity, since now it is possible for them to finance projects and business models that until now their realization was considered utopian. It is increasingly common to find outsourced IT departments in emerging countries. In many cases multinational companies find qualified personnel with competitive salaries, which allows the growth of these regions and the specialization in the technological sector, appearing new “FinTech hubs” that represent an excellent employment opportunity and economic growth and in many cases of convergence with the most developed economic powers.