What is technology?

Technology is the set of knowledge, skills, experience and techniques through which humans
change, transform and use our environment in order to create tools, machines, products and
services that meet our needs and desires. The word comes from the Greek (technical, art,
skill) and logos (knowledge).Technology brings economic growth causing increased
communication, easy and fast access to the new markets, increase in the marketing channels
and company mergers, technology made a positive impact to the economy
Example
For economists, is anything that helps us produce things faster, better or cheaper In this sense,
processes like assembly line production or creating medical vaccines are
considered technologies

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Technology’s Role in Economic Development

Technology encompasses a huge body of knowledge and tools that ease the use of economic
resources as a way to produce goods and services efficiently and innovatively. Technological
progress is essential to economic growth and development, and the more advanced the
technology available, the more quickly the local and global economy can improve.
Technology's role in economic development is further broken down below.
Time is Money
Technology can save the time it takes to produce a good or deliver a service, contributing to
the overall profits of a business.
Efficiency
Technology can contribute to the efficiency of a business's output rate, allowing for larger
quantities of products to be moved or of services to be rendered.
Specialization
Technology has led to an increase in the division of labour and specialization of jobs within a
business, further contributing to the efficiency with which a business is able to run.
Natural Resources
Technology has a huge effect on the ability of businesses and governments to access natural
resources and use them in the most effective ways possible to benefit both the business and
the economy.
Industrial Expansion
Thanks to the increased efficiency of labour with the ever-improving state of technology,
businesses are able to increase total output, which in turn leads to higher profits and greater
economic development.
Research
Better technology has led to further research into nearly every sector of business and science,
meaning businesses can benefit from all sorts of technological advancements.
The Internet and International Trade
Information technology is the single most important element in the success and growth of
international trade and job market growth, allowing businesses to share information and
conduct trade in less time than the blink of an eye
Example

Economic development includes initiatives that improve infrastructure, enhance our

education system, better our public safety, improve parks, and foster endless ways to
incentivize and attract new businesses and jobs
Properties of technology
Technology serves a variety of purposes and means different things to different people. In
today’s world technology can be found at every corner. From the local convenience store to
your local deli shop, technology makes the world function more efficiently. Technology
saves our time and effort, and on top of that, it enhances the security of our organization.
Numerous factors determine the importance of technology in business because the role it
plays is crucial for the operations to run smoothly and efficiently.

Reference: the nature of technology

Written by w.Brain Arthur
Page no 87 to 108

Technology Improves Efficiency

There is no denying the fact technology increases the efficiency of the company. The
advancements in the world of robotics and applied sciences help businesses facilitate their
customers. Moreover, due to the emergence of artificial intelligence, companies can now
make better use of technology. For instance, using catboats as customer representatives to
deal with customer queries. The implementation of technology in business saves time and
efforts involved in employing human labour and increases productivity, which is a huge
advantage.

Employees Need Technology to Work Efficiently

The role of technology in business is expanding at a breakneck pace. Employees also expect
their supervisors to provide them with the latest equipment so that they can work effectively
as well as efficiently. Moreover, the most recent technological equipment enabled
the employees to complete their task with better results and increased productivity
successfully.

Increased Employee Engaged

Technology is well-known for keeping employees engaged. It allows them to telecommute to

work and encourages them to collaborate with each other for sharing files and essential
information. In addition to this, technology also reduces the level of stress. Workload
decreases when the assigned tasks are completed in the given time. Employees can also enjoy
the flexibility to a certain degree. They can stay connected to the organization via
smartphones etc. and perform work-related tasks remotely.

Explore New Markets for Growth

With the implementation of the latest technological equipment, businesses can explore tons
of new markets to expand their operations and profitability. Technology can help in this
regard by conducting complex calculations and forecasts with authentic results. Authentic
results provide a better picture of management, enabling them to decide whether to go ahead
with the plan or not. Moreover, technology is advancing with new gadgets being introduced
in the market every other day. Companies can take advantage of this progression by
implementing relevant technological gadgets. These gadgets can assist them in their
operations, leading to better productivity and growth.

Technology and macroeconomics

In economics, it is widely accepted that technology is the key driver of economic growth of
countries, regions and cities. Technological progress allows for the more efficient production
of more and better goods and services, which is what prosperity depends on. However, the
mechanisms through which technology is developed, adopted and used in production are
complex. Their more detailed analysis can allow for new findings that could have important
impacts in many areas of policy, including science policy, research and development,
industrial policy, and both national and regional development policies. In fact, the concept of
technology itself as well as the individual and social capabilities required for its development
can now be studied at a much more fine-grained level leading to potential contributions that
may impact higher education, job creation and economic growth. Technological advances
have significantly improved operations and lowered the cost of doing business. Currently, as
an example, just a few technicians controlling robotic systems can operate an entire
manufacturing plant, and innovative inventory systems are capable of supplying needed parts
within a short time for assembly. Advancements in the computer industry, coupled with
advancements in telecommunications, have increased job opportunities and strengthened
economic growth. All physical barriers to communication over distances have been properly
overcome by the internet. In a similar way, manufacturing and consumer goods companies
have developed online links to their suppliers and customer support. Suppliers can keep track
of production line efficiencies through automated systems and can more efficiently ship parts
and materials to the required locations, reducing inventory and downtime. In addition to that
ecommerce and online banking capabilities have also helped reduce the cost of doing
business. Within this new context, and given the fast-paced emergence of disruptive products
and business models, as well as the transformative power of digital technologies on business
and society, executives must become masters of the global “technology economy”, being
capable of detecting the economic impact of such fast technological changes and respond
with similar speed and foresight. Many researches from many respected companies, such as
BCG, IMF and World Economic Forum show that whenever companies cut back on
technology investments aiming to shore up profits, the result is the opposite, as profits sink
significantly, and, as a side effect, GDP also falls dramatically, then a chain reaction starts
with the fall of labour productivity after a few years. As a matter of fact, what companies are
really doing is cutting back on an important investment that could create the next growth
wave and, in many instances, that investment could generate huge leverage, helping to lower
costs and expenses much faster than technology spending rises, but companies can only
achieve that by managing their technology spending properly. To do that, senior executives
require new metrics and new ways of thinking. In order to successfully navigate the
technology economics scenario and leverage optimum business performance, executives must
create, measure, and track virtual economic measures just as carefully as they follow metrics
about the physical world.

Reference: book , DAWN news article 2009 ,Google,

Book name economic science and technology, by Steven payson

Technology constrain
Factors of production
Input to production land, labour, capital and raw materials these are general cottagers of
production.
Capital goods are those inputs to production that are themselves produced goods such as
machines of one sorts or another, tractors buildings, computer.

Input technology output

Skills form management =
Motivations combine firm resource milk
Tractors meat
Land etc.
Worker
Feed
Breed
Etc.

Capital
We have three concept of capital

Financial capital physical capital human capital

Not a factor of production factors of production factors of production
=money machines but labour production
=bonds buildings =education
=stocks tools = training
=etc. Etc. = experience

Technological constraints
On firm: only certain combination of inputs is feasible way to produce a given amount of
productions.
Production set
All combinations of output and intput that are technological feasible.
As long as the input to the firms is costly it makes sense to limit ourselves to examining the
possible output for a given level of inputs.
Production function
A function describing the boundary of production set
Y=f(x)
Y= amount of output
F(x) =input (where x is the amount of input)
F(x1 x2) would measure the maximum amount of output y that we could get if we had x1 unit
of factors 1 and x2 unit of factor 2
T shits y =outputs y=f(x) production function

15 D

14 C

10 B

5 X Y Z T

1 2 3 4 X=inputs
A, B, C and D shows the maximum t shirts firm can produce at a given level of labour
It’s the boundary.
X,Y,Z and T are all the feasible .this firm can always produce 5 t shirts with 1,2,3 or 4
worker ( not efficient but feasible)
Example
F (k, l)
If the firm wants to produce 100 t shirts
100=10kl
Kl = 10
Any combination of (KL) that gives
K.L=10 is possible

200 T shirts: 200=10Kl

Kl = 20
Any combination of kl = 20 is possible

k= capital

10
5
2 y=200
1 y=100
L
1 2 5 10 labour

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