Technology - Can we keep up?

I was talking with a friend the other day about how fast technology is advancing and how hard it is to keep up with it all. It seems like today everyone is expected to have a car, an up-to-date computer with internet access and e-mail, a cell-phone, etc. Everything that we could have only dreamed of 10-20 years ago we're expected to have now.

Applying this to businesses today, I found an article from USA Today that is entitled "Technology: Keeping up with Changing Times." It discusses the rapid growth in technology in the business world, and how companies are having a hard time keeping up with the latest innovations. With the internet now a major part of the business world, it is expected for businesses to have a web page that they can use to do business over the internet. Also, we have become such a "Now" society, that if a business can't provide a good or service anytime and do it quickly, then they go out of business. As a result, it has become more and more difficult to start a small business and have it survive amidst the high competition in fighting the larger corporations. Is the advancing technology all a good thing, or are we going to become so competetive that we burn ourselves out?


C-Dizzle said...

It seems that strategic marketing creates most of the problems of keeping up with technology today. Here’s my brief example.

I bought a computer in pieces 3 years ago. My computer has slowly been dying piece by piece this last year because of a recent power serge. Having to replace these pieces is pretty expensive and annoying.

While looking for replacement computer parts, I’m looking around and seeing that the parts in my computer are only going to be good for a few more years anyway because the technology is changing so quick.

In order to keep up sales in the computer market, part makers are slightly modifying the newer parts so much that older pieces won’t work together with them. Overall what they’re doing is making it so that I have to buy a completely new computer because my computer has been made obsolete.

In the business world, this could be a huge problem for those with small businesses. The pressure to get new and up-to-date computers and software is huge and costly! These extra expenditures could be that extra straw on the camels back to some small businesses.

kamm said...

The reason that most people with small businesses are trying to keep up with technology is because they know it will be an asset. Commenting on what C-Dizzle had to say about the computers or technology possibly being the last straw, I'm sure that if small business don't adopt it, they will not be as succeesful as they could be. But that technology may be the only thing that will keep many small businesses alive.

Technology is the primary source of growth according to the New Growth Theory. Even though some small businesses may not survive because they can't keep up with technology, that same technology gives us oppotunities to create new businesses. The small businesses that choose to use the lastest technology will have a better chance at succeeding.

Ned said...

Despite the fact that we can hardly keep up with growth we see in the world, its this growth that we're benfiting from. Who cares whether I buy a cool new good from a corporation or smaller business? I sure don't. I'll buy the best good for the cheapest price. So if the large corporations can satisfy my wants and needs, I think its fine that they make small competition harder. The larger a corporation gets, the more jobs they can supply, so I can't see how it would hurt the economy. They're also in a position to change quickly with new technological developments. So... where's the downside?

Kid said...

Technology is the wave of the future. My parents just recently bought a new computer because my father needs it for our snow plowing company. It isn’t cheap to buy a new computer but the new system will cut down the time my dad spent writing out the bills and it helps his business by making it look more professional.

It cuts both ways. We complain about things becoming obsolete but that’s how life goes we went from moves on reel to VHS to DVD’s. Do we complain about the better quality we get from each upgrade? NO! This is what happens to small business they just upgrade and those who don’t most likely won’t make it in world of technology.

Dr. Tufte said...

This is all a reflection of a growth theory topic that is a little beyond what is in principles texts (but is in intermediate ones).

The idea is called capital dilution. It is the reason that population growth is bad for economic growth in the Solow model. The basic idea is that if labor grows, but capital does not, we will get poorer - because the new workers are not equipped with as much capital as they had been. The only way to get around this is to invest in new capital, which can get expensive.

Technological improvements have the same effect. Technology allows people to control more capital (think of the capital on the dashboard of your car, and how you can control it all). Well, when there is technological improvement, labor has the ability to use more capital, but you actually have to buy it for them. If the ability of labor (as a whole) to use capital is increasing both from population growth and technological improvements, then you have an expensive proposition to keep up with.

Growth theorists differentiate the amount of technology you have access to from the growth rate of that technology. The former makes you richer, but the latter makes you poorer. Unfortunately, the latter is the only way you can get more of the former.