Technology from an economic perspective

Technology from an economic perspective

With the decline in economic performance experienced by the major industrialized countries, talk about new economy is becoming increasingly widespread everywhere and on every tongue. Today, there is a radical change in the world's perception of the old economy, with advocates of the concept of a new economy arguing for a shift from a resource economy to a knowledge economy, on the basis that the ability to Access, processing and transfer of information have become an essential component of the economic growth industry, said Diana Farrell, director of the McKinsey Global Institute in San Francisco.

The rapid spread of the Internet, coupled with the tremendous developments in information technology, has already reached a dimension that has changed the aspect of human life, particularly in its economic side.

The Internet provides a great deal of information and a more effective access to the organization and employment of knowledge in ways that would have been in mind a few years ago and the greatest impact is evident in the area of the so-called value chain.

The term "new economy" originally dates back to the 1980s, when it referred to the transition of economic engines from manufacturing to the services sector. This shift has been accompanied by many concerns about the slowdown in productivity that the service economy will have, as a result of rising prices, low wages and low growth rates.

In 1996, Michael Mandel published an article in Business Week entitled "The Triumph of the New Economy", which emphasized the emergence of a technology-driven economy, a fast-growing economy with low inflation rates, which he called the "new economy." It is an economy that is quite different in substance from the service economy.

Moreover, the proliferation of modern technologies across the single industrial sector has a significant impact on productivity.

In the retail sector, for example, many companies have been quick to adopt scanners, coding line readers and ERP models in human resources, salaries and reports.

These systems have helped to automate processes that in the past required large staff, resulting in significant reductions in labour costs in various sectors of the industry.

It is no secret that IT investments depend on each other, often in a complex way, as companies implementing new, sophisticated and costly applications before they prepare the necessary foundation, will be vulnerable to disappointment, They either fail to realize the expected benefits or find themselves in renewals again, while companies that follow a structured approach and carefully sequence their investments often receive great returns.

Wal-Mart's (gradual change) approach to IT investment during the 1990s is a shining example.

First, the company implemented the software to manage the flow of products and store them across their supplier network and wide-spectrum stores, and as soon as they automated the flow of products focused on the use of information technology in Coordination between its operations and those of its suppliers is more rigorous and thereby significantly increased its efficiency.

With this more fluid coordination, Wal-Mart has been able to invest efficiently in technology to plan and re-equip its commodity mix. Finally, after merge all these capabilities, the company adopted the creation of a data store that uses information from a range of sources to address complex queries.

In conclusion, the success of IT investments depends on the specific characteristics of the industry and on the specific practices of individual companies. In order for it to achieve what is hoped for, users and vendors should reasonably apply it and adapt it to individual sectors and businesses and merge it with other innovations in Products, the challenge will be to use existing systems effectively while at the same time making the desired new investments that strengthen the element of excellence and support competitive advantage. The purification of information does not bring joy to everyone, but if properly addressed, it can be an important competitive weapon.