In the 21st century -- when technological gadgets and services are as present in our homes as in our workplaces -- imagining a business that doesn't make use of technology is nearly impossible. From office electronics to the latest online services, technology is an important driving force for business -- lowering barriers to entry for new enterprises, accelerating transactions, increasing the availability and usability of data and increasingly becoming a major part of the economy in itself.
Lowering Barriers to Entry
In economic terms, a barrier to entry refers to the cost of entering a business field. If you were starting a bakery, for example, your barriers to entry would include the price of ovens, flour and other necessary items. Technology tends to reduce these barriers by making mechanical and electronic power more efficient and economically affordable over time. A smartphone today has the same computing and data storage capacity as a computer 10years ago -- at a significantly lower price. That same process applies to everything from more efficient ovens to oil drilling equipment and serves to continually reduce business operational and entry expenses.
The deployment of advanced technology in a business generally serves to make operation more efficient. From reducing the amount of man-hours required to perform a task to freeing up office space with more powerful and compact devices, the continual improvement of technology allows businesses to do more with less. Processes, like sending correspondence that previously required fax machines and trips to the post office, can now be accomplished with a few clicks and a quick email, reducing costs and accelerating the general pace of business with increased efficiency.
Communications and Data
Information technology -- including everything from social media sites to online banking -- serves to make information and data more accessible and easier to use. With a few clicks, a CEO facing a tough business decision can now use online tools and databases to find the latest economic data, allowing her to make more informed decisions and adjust more quickly to a changing business climate. Employees can also use information technologies like online voice-calling programs, email and customer service chat applications to receive information about business changes from co-workers and communicate them to customers.
Technology as a Business in Itself
Providing technological solutions to business problems can be a profitable business in itself. According to research by the Boston Consulting Group (BCG), Internet businesses alone could account for about 5.4 percent of U.S. GDP -- over $100 billion -- by 2016. That makes technology both an attractive business opportunity and a considerable part of global economic vitality. To quote the press release for BCG's report, "If [the Internet] were a national economy, it would rank in the world's top five, behind only the U.S., China, India, and Japan, and ahead of Germany."
- BCG Perspectives: The Internet Economy in the G-20
- Strategic Management Journal: The Learning Curve, Technology Barriers to Entry, and Competitive Survival in the Chemical Processes Industries
- Wall Street and Technology: Technology's Growing Importance to Business Provides an Opportunity
- BBC: Big Data and Big Analytics Means Better Business
- BBC: Why Disruption is Good for Business
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