Technology and Global Trends

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Technology and Global Trends

• Chapter 2

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Chapter Objectives

• Identify the Significant Global Change
• Identify the Significant Technological Change
• Impact of Technological Change on Society and
  economy

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1-Significant Global Change
Forces Examples Nature of the workforce .
More cultural diversity . Increase in
professionals Technology . Faster and cheaper
computer . New mobile communication
devices Economic shocks . Rise and fall of
stocks . Decline in the value of the
Dollar . Surge in Oil Prices
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Significant Global Change (count-)
Forces Examples Competition . Global
competitors . Growth of e-commerce Social
trends . Retirement of Baby Boomers .
Increase interest in urban living World
politics . Opening of markets in China . The
war on terrorism following 9/11/01
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2-Significant Technological Trends

• Electronic commerce is commerce, but it is
  commerce accelerated and enhanced by information
  technology.
• Telecommuting the use of communications
  technologies to work in a place other than a
  central location.
• Information Technology the use of computer to
  store, process, analyst and design data and
  information.
• Information Communication Technology a combined
  of IT and Telecommunication.
• Development of new materials increasing
  competition with, and substitution of traditional
  materials generated from natural resources.

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3-The affect of Technological Change on Society

• Technological change has been an important factor
  in economic growth, both in developed and
  developing countries.
• We must also remember that it is through RD
  efforts and technology transfer the firms will
  get technological change.
• In this session our objectives will examine the
  affect of technologies change on society
• Economy
• Productivity
• Employment

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affect of technological change on economic growth

• Conventionally the rate of economic growth is
  defined as the rate of increase of GDP
• Economists like Solow, Abbramowitz, Fabricant,
  and Denison and other have tries, in the USA to
  study, using very sophisticated statistical
  techniques the link between economic growth and
  technological change.

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• Denison Study, He concluded that between 1929
  and 1957, in US, technological innovations
  accounted for 40 of economic growth.
• Based on many such studies, there is evidence to
  believe that the introduction of technological
  innovation has had a significant affect on
  economic growth.
• In fact, there is evidence to link the growth of
  the Japanese economy with increased RD
  expenditure and decline in the US economy with
  decreased RD spending.
• Look at Singapore , Taiwan, Japan, S. Korea etc,.

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Affect of technological change on Productivity

• Economic society uses input factors of labor,
  capital and natural resources to produce outputs
  of goods and services to meet its needs.
  Technology is the means by which inputs are used
  to produce an output.
• The productivity of a factor of production is
  defined as the ratio of the total output to the
  amount of that inputs used.
• An important in the productivity of any one of
  the factors of production, it therefore,
• Reduction in amount of that factor required to
  produce a fixed amount of output or
• An increase in the amount of output that could be
  produced using a fixed amount of the input

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Affect of technological change on Employment

• The impact of technological change on employment
  has controversial
• Two widely divergent views have been held
  regarding the impact of RD outputs on employment
  
• View 1 Technologies change eliminated jobs
• View 2 Technologies change creates jobs
• A third view is that both are correct depending
  on time horizon

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• If RD is carried out to produce new production
  technology that makes labor more productive then
  fewer workers will be needed
• Thus in the short run jobs are lose with all the
  associated social problem
• If the higher labor productivity is translated
  into lower prices for the products then the
  demand for the products could increase and more
  labor will be needed to produce them

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• When productivity increases and sales increase
  due to lower prices for the products, profits
  become available for reinvestment.
• This reinvestment could be used to create new
  jobs and new industries.
• This could then absorb workers who have lost
  their jobs due to increases in labor
  productivity.
• However, whether they can be absorbed or not
  would depend on whether they have necessary
  skills to accept the new jobs

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Affect of technological change on corporate
profitability and growth

• The main objectives of bringing technological
  change in a firms are
• To support current businesses
• To provide new business venture
• To explore new technology bases
• Technological change intended to support current
  businesses will have as objectives
• The extending of the product lifetimes of current
  products
• Lowering the costs of production of current
  products
• Creating new models of existing products

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• Technological Change which intended to provide
  new business ventures will have as its main
  objectives
• The creation of new product lines to enter new
  businesses
• Technological change to explore new technology
  bases will have as its main objective
• The deepening and broadening of the existing and
  potentially new technology bases of the company.
• ?Putting it differently it simply means that
  firms have to introduce technology to
• Survive
• Increase profit and
• Growth

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Example Transportation Cost cutting of JAL

• The cargo division at Japan air line (JAL) has
  devised a new air cargo container which keeps
  fish alive, but in a state of suspended animation
  without seawater.
• To keep fish alive at room temperature they must
  be transported in 20 times their own weight of
  seawater
• However, using seawater has disadvantage due to
  its weight and corrosive properties

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• JAL has found that by chilling the seawater
  further makes the fish comatose and their demand
  for oxygen virtually drops to zero. Thus water
  can be dispensed with, and the fish flown more
  economically. This process is called anabiosis
• JAL estimate that by this method a package of
  five sloe weighing 5 kg can be shipped USD 8.70
  whereas the old method would have cost
  approximately USD 60.00
• This new technology has great benefits for JAL,
  customers and fish producers close to Japan
  (Philippine and Vietnam)