Chapter 13

Technology: A Global Economic and Social Force

McGraw-Hill/Irwin Copyright © 2008 The McGraw-Hill Companies, All Rights Reserved.

Ch. 13: Key Learning Objectives Knowing the dominant features of technology, and what

fuels technological growth Understanding how e-commerce has changed the way

businesses operate and interact with their stakeholders Assessing the emergence of technology superpowers

and their effect on the global marketplace Analyzing new Internet opportunities and the challenges

they create Recognizing socially beneficial uses of technology in

business, education and medicine Evaluating recent efforts to address and reduce the

digital divide.

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The Explosive Force of Technology Technology

Broad term dealing with the use and knowledge of humanity’s tools and crafts Change is the dominant feature of technology

• Potential for future shock, in which change comes so fast and furiously that it approaches the limits of human tolerance

Technology’s effects are widespread• Ripples through society until every community is affected

Technology is self-reinforcing• Acts as a multiplier to encourage its own faster development

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Phases in the Development of Technology

Figure 13.1

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Factors Fueling Technological Growth Economic expansion

During the 1990s, U.S. businesses poured more than $2 trillion into computers, software, and other technology products

This helped sustain the economic boom that carried global business into the 21st century

Worker productivity During the late 1990s, productivity grew at almost twice the

rate of the previous two decades Businesses could afford more technology Workers were more adept at accepting technological

improvements

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Factors Fueling Technological Growth

Research and development investment Businesses very directed in their technology strategies and

expect quicker and direct return on their investment Government funding of technology R&D supplements

private funding• The U.S. government annually provided more than $60

billion to support technology-based research and development

• Similar figure in Europe is $45 billion• Rapid increases in technology development funding

seen in mid-2000’s in India, China, Taiwan, and South Korea

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Technology and E-commerce

E-commerce defined as business exchanges that consist of buying and selling goods electronically, via the internet Has become a way of life

• Business to business e-commerce sales reached over $109 billion in 2005, a 25% increase from 2004

• U.S. is global leader in e-commerce• Latin American and Asian companies are growing at a

faster rate as technology becoming more available Many companies are developing new approaches to old

problems (see excerpts from Exhibit 13.A on next slide)• Critical question related to rapid new technological

innovations: Should we offer the new application?

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E-commerce Strategies Mattel used the Web for designers and licenses in far-flung locales to

collaborate on toy design. In 2 years, Mattel cut the time it takes to develop new products by 20 percent.

Alcoa set up an online showroom to sell off slow-growth businesses. Interested buyers had access to digital balance sheets and profit and loss statements. Alcoa sold 3 businesses via the Web and saved $200,000 in travel, hotel, and meeting expenses.

Eli Lilly created a Web site where scientific problems were posed and the best minds solved them for cash prizes. In 2 years, Eli Lilly solved problems in months instead of the expected 2 to 3 years.

Lockheed Martin linked 80 major suppliers from around the globe, helping the company build a new stealth fighter airplane. Lockheed Martin saved about $25 million a year over the decade it will take to develop and test the plane.

Saint Alphonsus installed 32 miles of optical fiber for a network to speed transmission of medical images such as heart scans. The images can be viewed almost instantly instead of taking 24 to 48 hours when delivered by hand.

Krispy Kreme established a network linking 320 stores to take orders and alert store managers when they overstocked. Ordering errors were down 90 percent, while productivity gains allowed managers to run twice as many stores.

Exhibit 13.A

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Technology “Superpowers”

High technology industry is grounded in work done by companies that provide for the fiber-optic cables and servers that connect the networks

Business Week’s Information Technology 100, top 20 firms included companies that provide networking and telecommunications

Small, but powerful, group of companies control entrance ramps to the Internet See top 10 Web portals in Figure 13.2, next slide

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Top 10 Global Web PortalsFigure 13.2

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Emerging Global Participation

Most industrialized countries are pursuing strategy to include technology in the lives of their citizens

For example, in Korea 60% of population has mobile phones, but less than half were connected to Internet High foreign investment in Korean high-tech, so is positioned

to enter global digital community Developed and developing countries in Asia, South

America and Europe are attempting to increase access to technology for businesses and individuals

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The Emergence of the Internet

Defined as global electronic communications network linking individuals and organizations

Started in 1994, it is one of the most visible and widely

used technological inventions in recent time

In 2005, Computer Industry Almanac estimated 1.08 billion internet users worldwide, 1 in 6 people Top internet users, by country, shown in next slide

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Top 15 Internet Users by CountryFigure 13.3

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Internet Issues – Blogs and Vlogs

Blogs – web based journals or logs Over 35 million blogs tracked by Technorati, Inc. in 2006 “Blogosphere” doubling every 5 ½ months New generation of blogs, called vlogs, or video Web logs

appeared in mid-2000’s

Some governments have become concerned about

abuses of the technology and possible illegal activity In China, with 3 million bloggers in 2005, the government

banned blogs that called for democracy, criticized government leadership, advocated Taiwanese independence or included nudity or explicit sexual comments

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Internet Issues – Spam

Unsolicited or junk email sent in bulk to valid email accounts Has become big business and big headache for business According to Wall Street Journal, spam accounts for 45% of

all emails or 15 billion messages daily Organizations and individuals have adopted use of spam

blockers, but sometimes difficult to sort out bad emails Government has attempted to monitor, control and prosecute

spammers using Internet for illegal activity U.K. and Italy also has anti-spam legislation

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Internet Issues – Phishing

Practice of duping computer users into revealing their passwords or other private data under false pretenses U.S. industry association, Anti-Phishing Working Group,

reported 1,125 attacks in one month in 2004 Every phishing attack sends out anywhere from 50,000 to 10

million spam emails Attacks are growing rapidly and might be due to organized

crime

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Government Regulation of the Internet Internet abuses have fueled debate over whether

government should regulate content on the Internet and if so, which government or agency?

In China, government has ordered all web site and blogs to register or be closed down Some U.S. technology firms have cooperated with the

Chinese government policies; have helped enforce regulations limiting government criticism

Critics have called this a violation of human rights Diplomats, social activists and business leaders have

approached the U.N. as a possible governing body to monitor and regulate the Internet

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Socially Beneficial Uses of Technology M-commerce – commerce conducted via mobile or cellular

telephones In addition to their use for communication, in some countries have

embraced using cell phones for business transactions Technology and education

Recommendations of special Congressional report shown on next slide

Technology democratized education by enabling some students in the poorest and most remote communities access to best libraries, instructors, and courses via the Internet

Online education at the college level has grown rapidly• One for-profit online provider reported a 500% increase in

student enrollment in 5 years

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The Power of the Internet for Learning

Key recommendations from Congressional report Make powerful new Internet resources widely and equitably

available and affordable for all learners Build a new research framework of how people learn in the

Internet age Revise outdated regulations that impede innovation and

replace them with approaches that embrace anytime, anywhere, any pace learning

Protect online learners and ensure their privacy Sustain funding that is adequate to the challenge at hand

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Socially Beneficial Uses of Technology Technological innovations have changed

How patients are examined, diagnosed, and treated How health-related information is collected and stored Time and costs associated with health care

Wealth of medical information available over the Internet Sometimes patients are not protected – example of web sites

where prescription medications are available without physician oversight

Health on the Net Foundation, based in Switzerland, offers guidelines for medical internet sites

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The Digital Divide

Gap between those that have technology and those that do not

On global level, trend that developed countries having significantly higher development of technology and access than developing countries

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The Digital Divide

Evidence to suggest divide is becoming smaller: 2006 Pew survey showed 74% of whites, 61% of African-

Americans, and 80% of english speaking Hispanics go online; compared to 1998 numbers of 42%, 23% and 40%

Special programs are helping to lessen the gap• Federal E-Rate program in place since 1996• Samsung Corporation’s DigitAll Hope• One Laptop Per Child, announced in 2005; program by MIT

to distribute hand-cranked laptop computers in underdeveloped countries