In the last few decades technology has made great strides, It has affected every aspect of our lives from how we shop, to how we travel to how we communicate. Technology has also greatly affected businesses around the world. Let us take a look at the impact of a technological environment on a firm.
Factors of Technological Environment
1] Pull of Technological Change
Technological change generally refers to the advancements in the production and manufacturing process of different goods and services. So it is when we improve the way products are made or services are delivered. In these times there is always a new invention or better technology around the corner.
This technological change brings both opportunities and threats to a business. There is always the advantage of assessing the technological environment and embracing the new technology.
This can make your product better, bring down costs, edge out the competition, increase production capacity, etc. But at the same time, such changes if not adopted by the businesses can make them obsolete and out of fashion very quickly.
2] Opportunities from New Innovations
There are so many concepts, products, services, etc that have been unexplored in the market. The advancements in technology mean that there is the possibility of a new invention every single day.
And firms have to be alert about their technological environment to smell out a great opportunity. If the firm can capitalize on a new invention or product, it can become a pioneer in the industry.
For example, see the boom in the smartwatch and fitness tracker market. It all started back in 1998. Such new products enter the market every year. And to capture this market a firm has to be aware of its technological environment.
3] Risk of Technological Environment
With opportunities come threats. If the company does not keep a track of the new innovations and advancements in the industry, they risk being out of date. If a business cannot adopt a new technology it can be forced out of the competition. There is also the ever-present risk of new innovations and entrants to the market.
4] Role of Research and Development
The other important aspect of the technological environment is the role of the R & D of the country. Technology and business are very interdependent. The benefits of all the R&D a country does reaches the public via the businesses. These findings and developments improve our quality of life and uplift the economy and society.
Matters to be considered while assessing the technological environment:
- What production technology and information technology does the company employ?
- How important is each technology to the firm?
- Is there an external technology that the company depends on? What is the reliability of such technology?
- What has been the extent of investments in technology? Is the investment in the design or the implementation or the maintenance?
- How much have other competitors in the same industry invested in their technologies?
- Which technological investments should be withdrawn or limited?
- What are the additional technological requirements to meet with the goals and vision of the company both in the short and the long run?
Solved Question on Technological Environment
Q: Technology will generally help firms to shrink time and distance. True or False?
Ans: The statement is True. Firms use various technologies to streamline their processes, reduce paperwork, update their payment systems, managing finances, etc. This is a huge advantage as it helps to flatten the firm and reduce the time and distance of these tasks.