Free Technological Change Essay Sample
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Technology as we know is at the forefront of our society with electronic toothbrushes and touch screen phones becoming an everyday essential to our 21st century lifestyle. It is argued that technology has inevitably shaped and adjusted the way we live our lives today. Technology can be defined as the purposeful application of information in the design, production and utilization of goods and services as well as in the organization of human activities (BusinessDictionary.com, 2011).
Technology enhances business growth and development. There are two different dynamics of technological advancements that businesses will strive towards. They are product/process inventions and product/process innovations. They manage to achieve this through extensive research and development. Achievement of either of these dynamics can lead to businesses employ resources more efficiently and distribute outputs at a greater rate than the introduction of inputs, thus leading to a more productive workforce. Consequently, this will be in the heart of gaining a competitive advantage against its competitors.
This essay aims at evaluating and drawing upon an array of advantages and disadvantages that businesses gain throughout the process of technological development. This is in line with the consideration that development can pose both pros and cons to businesses.
Drawing back to the original statement regarding how a business will gain productivity through technological development, businesses have to consider how it is achieved and its true benefits to business. Considering Smith’s model of specialization and division of labor, we can see that simple adaption of the organization production process will utilize division of labor. This will lead to more efficient and productive labor force. Businesses taking this theory into account can consider how technology can be used to help them to achieve increased productivity. A good example of this would be process innovation, which is the implementation of a new or significantly improved production or delivery method. This includes changes in techniques, equipment as well as software (www.innoviscop.com/en, 2011).
Businesses choosing to apply process innovation are bound to enjoy a number of advantages. The use of production process, correct use of technology and the division of labor allows businesses to anticipate a rise in productivity through specialization and use of machinery. An example of this can be the rise of the mechanical conveyor belt, which is a simple process that facilitates goods to move from one place to another. Another benefit of conveyor belts is the fall of a firm’s costs in the long run. Expansion of fixed capital into a larger production process with the help of a new process innovation and specialization leads to an increase in firm’s economies of scale.
However, the achievement comes with a cost. Businesses that wish to excel at the market place and achieve the fruits of success have to consider a number of costs. Product/process innovation or inventions of new products involve a high level of research and development. Research and development are the key strategic factors that are more often than not a crucial element of a company’s survival. Within a marketplace with constant demand shifts, firms must respond by continually adapting their range of products or services. The development of new technology can involve huge upfront costs with a very large initial investment in the short term and the prospect of gaining a competitive advantage in the long term. However, other significant costs include those of training. Firms will have to consider the cost of training workers, which can hinder productivity in the short term. Businesses within the R+D process will have to evaluate whether the initial investment will create an advantage or it will be a waste of financial costs and time. Examples show that some businesses will keep to older developments and as they step up to new advances, they may have more costs than benefits.
Prior to these factors firms have to gauge their intellectual property rights. Intellectual property rights may be expensive and recent events show that a clash of intellectual property rights has seen bans of sales in some countries. For instance, Apple and Samsung have gone to court once and again in their on-going, tit-for-tat patent war. Apple’s lawyers in Sydney claimed that Samsung’s Galaxy Tab infringed patents relating to its touch screen interface (www.bbc.co.uk, 2011). The assertion of intellectual property rights could create another cost of research and development, which in theory is another barrier of entry into the market by other competitors.
After successfully achieving an innovative new product and gaining correct intellectual property rights, it is important to think what the business is about to face in the near future. The main issue that businesses are facing is unemployment. With new technological advances accelerating processing times, replacing labor in the process and changing the nature of the employee’s role within the work face, the injection of technology can host more than just monetary costs to the business. Technology can allow one worker to do the job of two or three leading to an increase in productivity. However, this is likely to make certain jobs outdated or unnecessary. In addition, after the initial cost of installing the new technology it is often cheaper to maintain and serve the equipment rather than sustain the equivalent amount of labor productivity. It should also be mentioned that technology has become so user-friendly that junior staff members can quickly be trained and manage complex as well as sophisticated systems. It is argued that it can have a strong effect of the quality of decision-making. It is also argued by American sociologist Harry Braverman that new technology in the work place would, under capitalism, continually lead to increased polarization of the workforce into skilled and unskilled workers (Lewis, 2007; Ian, 2011, p.140).
However, drawing on this point an advantage is evident. Whilst labor intensive jobs may have been made redundant, a rise in creation of new employment opportunities is evident. The constant changes in technologies lead to an increase of demand for computer programmers and other jobs.
Not only does the development of technology have an effect on the structure of the labor force, but it also has an effect on the structure that businesses choose to communicate. Advances in the information technology have enabled businesses to instantly connect with people all across the globe. This in turn has influenced the broadening of business opportunities through the development of globalization. Globalization, being a key part of business success in the 21st century, allows all economies to benefit from shared information rapidly and efficiently. This is through emasculation of the geographical barriers. This allows businesses to penetrate different markets economically and to approach different countries socially.
IT has helped to channel the cultural gap between certain countries by allowing the views and ideas of different cultures. This may act as an advantage to businesses as they strive to outsource in different countries. It has also allowed the growth of business mobility. The development of personal electronic devices for making sales, orders, inquiries, etc. has a clear surge in productivity. It has also seen an increase in home working or telecommuting that allows employees to work from home over a company network. The advantage is the reduction of fixed overhead expenses, but the disadvantage is that it is a form of structural unemployment.
However, the expansion of IT is associated with some weaknesses. The first is the idea of impersonal perception. Businesses choosing to offer solutions to queries and problems via electronic services, such as computerized voicemail answer phones and default emails, may find themselves unfavored by certain customers. This may pose a significant disadvantage against competing firms offering a higher quality of customer service. Another drawback is the issue of security. As seen in recent tabloids, personal information such as emails and text messages are under threat by hackers both internally and externally. An example of this is shown in a Computer Security Institute survey report, which has it that within the USA in 2007, $21.1 million was lost due to financial fraud, $8.4 million to viruses, $6.9 million by system penetration by an outsider and $5.7 million due to confidential data theft (http://smallbusiness.chron.com, 2011).
Certain technological developments rely on huge sources of energy in their production process, which in turn creates enormous negative externalities. Externalities are treated by the government as a huge pollution issue and have created permit caps in which producers are allowed to pollute, too. Business polluting over this permit obviously expects heavy taxation. This in turn can deter businesses future investment plans in production, as the cost of taxation may exceed future benefits. Technological change within the correct environment can pose as huge advantage to business not just economically but socially, too. It is true that technological changes do hold the correct mechanics for successful business efficiently and does enhance businesses differential between other firms, but it does rely on certain dynamics to achieve this.
Conclusively, if firms were able to implement the correct practices to insure the true benefit of technological change, they can in turn achieve the fruits of success through a competitive advantage. By understanding which research and development needs to be implemented and the potential costs of their outcomes, firms would be able to reduce the likelihood of probable floors in developments. However, losing the manual labor is unavoidable, but the prospect of creating higher skilled occupations can be an advantage to our industries and the economy at large.