Technological changes have reduced the cost of capital relative to labour, encouraging businesses to use more physical capital, in particular more computers and computer-based equipment. And there has been an accompanying shift in the demand for labour away from unskilled workers.
These technological innovations, along with reductions in transportation and communications costs, have also made possible a wider geographic dispersion of the production process -- not just nationally but internationally. And to ensure access to foreign markets, countries have been pursuing multilateral and regional trading arrangements.