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Technology and Global Trends

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Title: Technology and Global Trends


1
Technology and Global Trends
  • Chapter 2

2
Chapter Objectives
  • Identify the Significant Global Change
  • Identify the Significant Technological Change
  • Impact of Technological Change on Society and
    economy

3
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
4
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
5
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.

6
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

7
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.

8
  • 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,.

9
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

10
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

11
  • 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

12
  • 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

13
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

14
  • 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

15
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

16
  • 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)
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