How Does Technology Affect the Economy?

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Technology has affected the economy through direct job creation, contribution to GDP growth, creation of new services and industries, workforce transformation and business innovation. The use of technology has been linked to marketplace transformation, improved living standards and more robust international trade. Technology has revolutionized virtually every industry in the economy.

Technological advances have significantly lowered the cost of doing business. For example, a manufacturing plant can be operated by just a few technicians controlling robotic systems. Innovative inventory systems are capable of supplying needed parts within a short time for assembly. Computers have drastically reduced the cost of carrying large inventories of intermediate parts and finished products via computerized accounting. Advancements in the computer industry, coupled with advancements in telecommunications, have increased job opportunities and strengthened economic growth. The Internet has overcome the physical barriers to communication over distances, and organizations and individuals can easily place orders through an online platform.

Similarly, manufacturing companies have developed tech-based links to their suppliers and customers. Suppliers can keep track of production-line efficiencies through computer hook-ups and can more efficiently ship parts and materials to the required location, reducing inventory and downtime. International manufacturing companies connect design centers in different countries to create international teams. E-commerce and online-banking capabilities have also helped reduce the cost of doing business.