chapter 2 technology and global trend

8/13/2019 Chapter 2 Technology and Global Trend

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Technology and GlobalTrends

Chapter 2


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Chapter Objectives Identify the Significant Global Change

Identify the Significant TechnologicalChange

Impact of Technological Change onSociety and economy


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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

1-Significant Global Change


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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

Climate Change . Volcano,Earthquake in Japan

Significant Global Change (count-)


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2-Significant Technological Trends Electronic commerceis commerce, but it is

commerce accelerated and enhanced by informationtechnology.

Telecommutingthe use of communicationstechnologies to work in a place other than a centrallocation.

Information Technologythe use of computer tostore, process, analyst and design data and information.

Information Communication Technologyacombined of IT and Telecommunication.

Development of new materialsincreasingcompetition with, and substitution of traditional materialsgenerated 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 anddeveloping countries.

We must also remember that it is through R&Defforts and technology transfer the firms will gettechnological change.

In this session our objectives will examine the affectof 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 sophisticatedstatistical techniques the link betweeneconomic growth and technological change.


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Denison Study, He concluded that between 1929 and1957, in US, technological innovations accounted for40% of economic growth.

Based on many such studies, there is evidence to believethat the introduction of technological innovation has hada significant affect on economic growth.

In fact, there is evidence to link the growth of theJapanese economy with increased R&D expenditure anddecline in the US economy with decreased R&Dspending.

Look at Singapore , Taiwan, Japan, S. Korea etc,.


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Economic society uses input factors of labor, capital andnatural resources to produce outputs of goods and servicesto 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 usinga fixed amount of the input

Affect of technological change on

Productivity


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The impact of technological change on employmenthas controversial

Two widely divergent views have been heldregarding the impact of R&D 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


Employment


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If R&D is carried out to produce new productiontechnology 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 intolower prices for the products then the demandfor the products could increase and more laborwill be needed to produce them


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When productivity increases and sales increase dueto 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 skillsto accept the new jobs


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The main objectives of bringing technological changein 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


corporate profitability and growth


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Technological Change which intended to providenew business ventures will have as its mainobjectives: The creation of new product lines to enter new businesses

Technological change to explore new technologybases 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) hasdevised a new air cargo container which

keeps fish alive, but in a state of suspendedanimation without seawater.

To keep fish alive at room temperature theymust be transported in 20 times their ownweight of seawater

However, using seawater has disadvantagedue to its weight and corrosive properties


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JAL has found that by chilling the seawater further makesthe fish comatose and their demand for oxygen virtuallydrops to zero. Thus water can be dispensed with, and thefish flown more economically. This process is calledanabiosis

JAL estimate that by this method a package of five sloeweighing 5 kg can be shipped USD 8.70whereas 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 andVietnam)

chapter 2 technology and global trend

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