Impact Of Technological Innovation On Sustainable Economic And Social Development Essay.

Ryan Avant et al (Economist October 4, 2014) have suggested that innovation and technology developments have in the past created pain but ultimately benefits. The Third Wave 'digitalisation' may prove to be more problematical.

You are to produce a Briefing Paper (Essay) to the senior management team (in preparation at an Innovation and Technology conference) in response to the assertion.

The Emergence of Technological Innovation as a Major Force Behind Economic Growth

The current study explains the significance of the emergence of technological innovation as a major force behind economic growth despite the pains that it has meted out in the past. In particular, the present study attempts to investigate the impact of innovation and technological developments on sustainable economic and social development. However, the present study also presents a critical review of the rise of the new digitised platforms in the economy and evaluates the concept of Robber Barons outlining the relationship between the state and the business.

In addition to this, the current paper also illustrates the consequences of the third great wave of industrialization in comparison to the first two industrial revolutions. This in turn helps in critical evaluation of the impact of the third great wave that has resulted in invention as well as economic developments, primarily set off by the advancements in the computing and information and communication technology. However the scientific as well as technological innovation gave rise of the new platforms that formed the basis of the digitalisation and the sources of economic opportunities.

As rightly put forward by Andersson (2012), the physical platforms primarily refer to the stand that can be used as a support or basic inputs for other activities as well as products. The idea of physical platform has been there for quite a long time; however, the rise of digital platform was first marked in the software industry during the period 1980s and 1990s. The digitalised platform segmented into operating systems and applications were the two core parts of the platform that had the capacity of advancing tomorrow’s economy as well as the government. The digitalised platforms were utilised by industries such as the railways, car industry, banks along with other software and IT and hardware industries. Nevertheless, Ark (2014) argued that the advent of the digitalised and automated platform initially affected labour intensive industries where labour forces were replaced by automated modes of work. As a result of the advent of the new digitalised platform a huge population of the work force lost their jobs and the people felt the pain of replacement of labour intensive work procedure with the automated and mechanised one. However, the advent of the mechanised platform initially inflicted immense pain on the population initially, but later on the impact of the platform subsequently proved to be monumental (Core.ac.uk, 2016).

As rightly mentioned by Talukder (2014), the platforms radically changed the making and building block of the economy by lowering the costs of operations of the business by utilizing low labour intensive technologies thereby started utilizing central data banks and information systems, built energy- saving applications, online banking and payment processors and digitalised value chains among many others. As suggested by Staton (2012), the rise of the new digitalised platforms helped the banking industry to form online networks, aggregated financial data for keeping books, use payment processors such as the First Data and TSYS. The railways developed the power grid system and other automated physical platforms. In addition to this, the power industry used platformisation in order to develop energy saving applications and smart meter apps to emerge as a digital material for catering services in a more cost effective and fast way (The Economist, 2015).

Impact of Innovation and Technological Developments on Sustainable Economic and Social Development

The IT industry served to the other industries. The systems with the vertically assimilated components with segmented layers such as the main stream computers showed the way for sketching the architecture. The IT sector therefore can be seen as a inverted pyramid where the base represents the powerful platforms that helps businesses to gain economies of scale and the top represents the agility of operations as well as creativity of operations that can be further fragmented into several divisions.  However, the workers initially found it very hard to cope with the fast mode of operations of the business in almost all the digitalised economy (Gelookahead.economist.com, 2016).

As rightly mentioned by Rampersad and Patel (2014), the second industrial revolution occurred in the period between the Civil War and the early 20^th century essentially marked the period of emergence of remarkable rate of growth in the arena of technology, corporations and the overall economy. In addition to this, the favourable government policies in the era of tremendous growth in the business and the industrial development enhanced the market advantages and also the key people who managed the big corporations. The key people who headed the huge corporations in that age were less worthily known as “Robber Barons”, primarily due to their anti-competitive business practices as well as exploitative relationships with the workers (The Economist, 2014).

The Robber Barons of that age struggled to form monopoly businesses by developing innovative process of management, arrangement and organization as well as the production. The practices of the late 1800s were correctly coined by Mark Twain as the “Gilded Age” as the corporate of the late 19^th century left innovative and new trails in the business world though the exploitative and the non-competitive nature of business practices needed to be evaluated against the laws of the modern times and the ethical considerations (McDaniel, 2012). Therefore, it can be clearly seen from the concept of Robber Barons that even the high rate of growth and inexorable march of the industries towards development cannot ensure the enhancement of the quality of life of the people and the entire society. Moreover, the tremendous growth rate due to the industrial revolution also cannot make proper functioning of the market and overall development of the economy. Therefore, it can be said that government plays a key role in the business structure and concepts of Robber Barons and the two needs to complement each other for creating the modern ways of carrying out the business operations. However, the government interference needs to be adequate that can help in generation of wealth instead of hindering the commerce and at the same time aid in controlling the businesses that exploit workers as well as consumers, evade the taxes and carry out the practices that are against the interests of the society (The Economist, 2016).

Rise of the New Digitised Platforms in the Economy

Kogan (2012) rightly suggests that the lack of proper management of the innovation in the technological developments and the coordination between the state and the business is necessary for appropriate functioning. The state and the business are the two complementary sides that need to support each other. The government needs the support of the businesses to drive the rate of economic growth, generate employment opportunities, and increase exports for creation of trade surplus required for making payments in the world trade. On the other side, the businesses require government support for providing them an appropriate legal environment, basic security, creating necessary infrastructure and educating labours to undertake the daily business operations. The government also assume a lot of scientific research works and fund them that the businesses can utilize for their own commercial needs by converting the same into marketable products, for example, the internet network, satellite positioning process and drug formulations among many others. Therefore, the intervention of the state is necessary for proper management of the innovative technology and the application of the same for business purposes. The state intervention can also help in avoiding the anti competitive and the unfair practices by the industry leaders for the betterment of the society (Radio National, 2016).

As rightly put forward by Iordanova and Cunningham (2012), the third great wave of digitalisation created the new wave of invention and at the same time economic disruption primarily driven by the improvement in the computing as well as advanced communication technology that emerged in the late 20^th century. Staton (2012) opines that the third great wave of digitalisation had the potential to deliver a similar combination of social stress as well as economic evolution driven by technologies such as the intelligence of the mechanised operations, ubiquitous web and the improved robotics with the capacity of delivering several noteworthy innovations. The technological innovations in the third great wave such as the unmanned vehicles, drones, mobile technologies, language translating machines and many others aggravated the speed of development and swept away the old economic frames that in turn transformed the society and developed the lives of the people. The new economic opportunities delivered on a mass scale replaced the old ones. McDaniel (2012) opines that the new economic opportunities had the capacity of destroying the job opportunities and labour intensiveness of operations. According to the opinion of McDaniel (2012), around 47% of employment opportunities in America is under threat due to the advent of the automated mode of operation. Therefore there is an urgent need for the up gradation of the skills of the workers in order to maintain their continued employment (Library.uiuc.edu, 2016).

Critical Review of the Concept of Robber Barons

Rampersad and Patel (2014) rightly argue that the emergence of the digital revolution is creating segmentation between the skilled and the wealthy and the rest of the society. As indicated by Iordanova and Cunningham (2012), the new technological innovations in the past helped in raising the wages by enhancement of the productivity with the gain being divided between the skilled and the semi-skilled workers and also between the owners of capital, labours and the end users. Therefore, it is apparent that the new technology is creating wide gaps between the earning levels of the skilled and the semi-skilled or the unskilled workers, owners of the capital and the labour. Therefore, along with empowerment of labour productivity the new third wave of digitalisation has also created a big pool of under employed workers that in turn is discouraging investment in the economy.

As rightly suggested by Kogan (2012), the impact of technological evolutions on trade is also altering the basis of trial and error methods of economic development mainly in less developed economies. The mechanised manufacturing work that requires skilled design of work accounts for a larger proportion of the total value of trade that is subsequently leading to pre mature deindustrialisation in the developing countries. The governments increasingly depend on the developing industrial sector to absorb greater percentage of the unskilled workers primarily from the less developed and rural workers. Therefore in both the rich and the emerging economy, innovative technology is generating opportunities for the workforces that were earlier tied and held back by the financial as well as geographical constrictions. However, the new job opportunities for the labours with modest skill levels have become scarce in comparison to the bonanza job opportunities created by the previous industrial revolutions.

The first industrial revolution that started in the late 18th century and the second one approximately hundred years later brought about radical changes in the business and the economy. Workforces felt uncomfortable to cope up with the dynamic changes in the work process and many lost their jobs to Cartwright’s power loom and thereafter to Edison’s electric light in addition to Benz’s horseless carriage along with other inventions. Nevertheless, they generated economic opportunities that were successfully replaced by new work. However, it is yet to be seen whether the digital revolution also has the potential to create job on a mass scale in order to make up for the job destruction due to the digital revolution (Gelookahead.economist.com, 2016).

Conclusion

The above study critically evaluates the economic opportunities brought about by the technological innovation and digital platformisation. The study presents a comprehensive comparative benefit analysis by focusing on the economic benefits of the digitalisation and at the same time outlining the ill effects of the capital intensive and mechanised systems. The systems of digitalisation is also creating new demands that are predominantly lesser labour intensive and fail to absorb unskilled labours in the industry and therefore can subsequently lead to premature deindustrialisation. However, the government can formulate strategies to educate the workers to avoid deindustrialisation and to handle the dynamic changes in the industry work procedure by adequately equipping them with the necessary education and the skill sets for continued employment. The digitalisation has certainly improved the pace of business operations by countless innovative inventions that can open up new economic opportunities and create economies of scale and in turn evolve the entire business and the state.

References

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