Information and Communication Technology Impact on Economies

Information and Communication Technology, or ICT, presently has become a serious part of the economy. Nearly all companies and consumers use computers and the internet for economic purposes. Now the customer has a wider variety of stores and ways to purchase from. Items can be bought, customized, or even services can be ordered using the current level of technology today. The influence of ICT in different economies worldwide has rapidly increased within the past twenty years. Depending on the area or region, these advances show different results from computers, cell phones, to internet usage. 

While developing countries may not gain the benefits of stronger economies in ICT, there are advantages to trailing behind. The costs of staying on top of the latest technological advance has risen almost exponentially since the coming of the digital age. Weaker economies trailing in their level of technology available can afford a cheaper means of acquiring technology either through donations or purchases in bulk of unwanted items such as computers and cell phones that are outdated.

 

As you can see, the growth of convenient technologies skyrocketed throughout 1999-2009. I think it may be better for economies to wait a little for prices to drop to purchase the latest technological advances from microchips to supercomputers. We may not have the latest technology available at all times but some of us are content with what we have. I have an older model of a cell phone but I've resisted updating for years simply because I had no reason to. It works the same as the latest models and is compatible with everything I use it for. Do you think our economy should always do what it can to stay on top of the technology game? If you have a cell phone, is it the latest model and was it worth the cost to get it; or do you have an older one that you are happy with?

http://www.plosone.org/article/info:doi/10.1371/journal.pone.0048903#pone-0048903-g001

The Painful Transitioning of IT

http://govcentral.monster.com/benefits/articles/4616-transition-hottest-jobs-majors-and-agencies


article: http://forumblog.org/2012/10/king-ludd-is-still-dead/


Some say technology is replacing workers and others say technology is not. Which one is it?

Kenneth Rogoff thinks it is both. He states, "Back-of-the-envelope calculations suggest that, worldwide, technological change could easily lead to the loss of 5-10 million jobs each year. Fortunately, until now, market economies have proved stunningly flexible in absorbing the impact of these changes." He also states how even though people may lose their jobs, they just need to continue to look for different jobs even though the transition and process is a painful one. I see "painful" as having to invest money to educate and retrain yourself. The process may be time-consuming and you may have to make ends meet with finances. As humans, we stick to routines, systems, and traditions so I can imagine the difficulty to adapt to new strategies to be a more desirable candidate or employee.

Technology is actually broadening the markets and making it possible to reach more consumers. The hard part for firms is the transitioning. The rapid shift to technology may have hit some unprepared firms too forcefully. Firms are constantly competing to have that upper edge to produce at a lower cost and outsourcing and technology has allowed firms to find multiple ways to do so. However, firms that haven't invested in technology are having difficulty finding ways to lower costs and to keep up with the rest of the firms.Some even go out of business.

What are some strategies you can think of that may help firms or workers adapt to technological changes?

The Korean Economy and Information Technology

     Due to the recent adoption of information technology in Korea, the economy of this country has strengthened significantly. (For the statistics, please see the following link:  http://www.unescap.org/drpad/panel/hwang/HWANG.htm). They are not stopping, however, with where they are now. Korea has implemented a new policy to use information technology to create what they are calling "Cyber Korea 21" which is basically a new society for the country based on knowledge and information. The government is creating new jobs by reinforcing the information infrastructure, increasing the national productivity, and helping out new businesses.

     Something interesting that I found was that Korea is implementing computer courses for over ten million students as well as civil servants and those in the military service in order to create a "society without 'information-have-nots'". While it may seem as if they are using information technology to destroy tedious, repetitive jobs, they are giving those who are occupying those jobs a chance to move up instead of just leaving them on their own. They are eliminating jobs, but creating more in their places.

     Since 1995, the Korean economy has been growing due to information technology and they seem to have a pretty good plan to continue this trend. How are other economies growing due to their implementation of information technology? In what ways could information technology be detrimental to those economies or even the Korean economy?

http://www.unescap.org/drpad/panel/hwang/HWANG.htm

When Did Technology First Impact Employment?

The rise of technology has no doubt been overtaking jobs and employment opportunities for longer than any of us have been around. Some say that this phenomenon started during the Great Depression. People were losing jobs faster than they knew and some of this was due to the upcoming technology such as in a manufacturing type setting. It was easier and more productive to implement the use of the technology as opposed to using human workers. People began to realize that unemployment and the rise of productivity were somehow correlated due to technology.

                This problem however, was not as serious as it is today and it did not last long. Soon after the Great Depression, World War II began and the technology destroying jobs issue was thrown out the door, everyone was needed to get through this time any technological advances were thought of as a leg up on the enemy. But as soon as this war ended the issue was brought up again.

                While there are many statistics on when technology first became more productive and efficient than human workers, when do you think that it first became a serious issue for our economy? Did it happen before the Great Depression or even after World War II?

http://www.northeastern.edu/socant/wp-content/uploads/Handel-IT_Final.pdf

The New Music Industry

It’s a really good example of how advances in IT can completely change an industry. It might be one of the best examples. It has microeconomic and employment implications within the industry itself and broader effects in how consumers ultimately use the new technologies available to them. So let’s do a case study of sorts using the music industry. And I think most people should be able to relate to this in one way or another.

The groundwork for the massive change within the music industry probably started when Napster first allowed people to download free music from the internet. If anyone doesn’t remember what happened with Napster, read here:

http://www.theguardian.com/music/2013/feb/24/napster-music-free-file-sharing

A few years later, Apple introduced the iPod, made some deals and got some licenses from the record labels, and now users have easy access to cheap music online. After Napster, it was inevitable. Now there are plenty of options for people to get music online.

So before the digital music era, everyone who wanted to get the music they wanted had to go to a store and do something like this: 

(source:  http://phatbootyent.com)

Now all you need to do is go on the interweb and search for whatever music you’d like to hear, and it will most likely be readily available to you. And it offers consumers a much broader and easier access to listen to new music. This in effect creates greater competition between the musicians themselves and decreases the barriers of entry for new musicians. A Rolling Stone article has Amanda Palmer, former singer and keyboardist of the Dresden Dolls, use the term “working-class musician” to describe the new environment of the music industry. You can read that article here: http://www.rollingstone.com/music/news/survival-of-the-fittest-in-the-new-music-industry-20121108

Of course the record companies themselves were the biggest losers. You could argue artists may have been negatively impacted from losing the revenue from record sales, but like the Rolling Stone article says, record sales were never a huge factor in the artist’s incomes. If anything, social media has now provided musicians with a greater benefit than what they previously would have gained in physical record sales. The biggest winners in this new market are of course the consumers. And someone has to design, build, and maintain all of the IT systems involved in making this digital market work, so new jobs were created outside of the music industry.

So is the music industry better off because of the new digital environment? I guess it depends how you look at it. Either way, it definitely has changed. And like the saying goes, it isn’t the strongest or smartest that survive, it is those most adaptable to change.

IT Influences the Economy

When the idea of using information technology was first introduced, companies were skeptical. Companies did not rely too much on information technology for the success of the organization.  In the past, companies only invested a small portion of their budget towards IT. Over the span of 40 years, the budget for information technology has increased. This increase is due to the fact that companies became aware of the significant profits that IT contributed to for the organization.

(Source: http://www.therefinishingtouch.com/blog/2008_12_01_archive.html)

 
According to the summary article The Economic Impacts of Information Technology, "the most effective companies have reorganized the way they make decisions, interact with customers and suppliers, and innovate to take advantage of the digital revolution, creating trillions of dollars of intangible organizational assets in the process." This means that companies use information technology in all parts of the organization to increase its profits. Due to this increased profits in organizations, IT has contributed to the economic growth of the United States overall.

http://www.cra.org/ccc/files/docs/nitrdsymposium/onepagers/brynjolfsson-summary.pdf
http://www.therefinishingtouch.com/blog/2008_12_01_archive.html

How IT Impacts Employees

Most employees work in the same environment every single day, so it only makes sense that if IT is involved in their workplace then it affects how the employees work. Some say that information technology is detrimental to the work place. They believe that the disadvantages that IT gives to the employees outweighs the advantages of IT. On the other hand, some believe that IT is good for the employees and enriches their job environment. To balance these opinions with equal critic, information technology can be separated into two different categories.

The first category is automated technology. Automating technology eliminates the human skills that are needed to complete certain work processes. This decreases the need for employees in that working area, and therefore employers are hiring a little bit or none at all for those working environments. This type of IT also demoralizes current and potential employees because they are unaware of when automated technology will make them unnecessary. The automated technology allows employers to question how far are they willing to make their organization rely on IT instead of human labor?

(source:future-research.com/infoTech)

 The second type of IT is informated. The purpose of informating technology is to enrich the work processes. This is an advantage to employees and employers. In this case information technology will remove repetitive tasks which will allow employees to be more productive in their work process. Due to the presence of this type of IT, employment will be affected by how creative and intellectual an employee is. Will this mean that in order to seek for employment, a person needs to know how to work out problems without specified rules? How can we challenge ourselves so that we rise above IT and bring in positive results?

http://digitalcommons.ilr.cornell.edu/cgi/viewcontent.cgi?article=1151&context=cahrswp

http://www.future-research.com/infoTech.html