THE IMPACT OF SCIENCE AND TECHNOLOGY ON THE ECONOMY - SCIENCE - 2025

The impact of science and technology on the economy has been very marked, especially since the last decades of the 18th century. From approximately 1760 to 1840, a series of scientific-technological changes made possible an enhanced use of natural resources.

It also allowed for the mass production of manufactured goods. This meant the change from an agrarian and artisan economy to one dominated by industry and the manufacture of machinery. Thus, in this period known as the Industrial Revolution, new basic materials began to be used, mainly iron and steel.

Other changes included the use of new energy sources, including fuels and motive power. These include coal, the steam engine, electricity, oil, and the internal combustion engine. New machines such as the power loom were also invented, which increased production with less expenditure of human energy.

Studies have shown that technological advances not only have a positive impact on the economy, but also expand it.

Times marked by technological innovation - such as the 1920s, 1960s and 1990s - pushed industries to produce more. This made the economy grow and improve the financial health of the countries.

In the 20th century the impact of science and technology on the economy became more evident. In particular, the advancement in information and communication technologies has caused many structural changes: the economy has reorganized, giving way to globalization.

Technology and science impact areas

Public politics

Many states have recognized the impact of science and technology on the economy. They understand that both play a key role in improving economic performance and social well-being. However, they also know that to reap their benefits they must design and implement the right policies.

Thus, among the political tools of many governments are the promotion of competitiveness and globalization. They also drive the innovation process and investment in pure and applied research.

Institutional structures

Another area where the impact of science and technology on the economy is evident is in institutional structures. For example, the ability to distribute electrical power in discrete units allowed powering numerous labor-saving devices, even in the home.

This technological change gradually integrated women into the workforce and increased production. Likewise, gas and then electric lighting increased the length of the working day.

On the other hand, the development of the gasoline engine led to more flexible transportation, and both the telegraph and the telephone shortened the distances, enabling communication and coordination of activities in space and the expansion of markets.

Economic activities

Technological change drives long-term economic growth, productivity, and improvement in living standards. At the same time, the appearance and diffusion of new ideas, products and production techniques throughout the economy implies the disappearance of some economic activities and the appearance of others.

Historically, this process has led to the creation of new jobs. This happens as new industries replace old ones and workers adapt their skills to changing and expanding demand.

However, it also causes the opposite effect. For example, the wool factories put out of service the cottage industries that operated handlooms.

Advantage

Increased productivity

The greatest impact of science and technology on the economy is on productivity. This means more production at lower cost.

As a result of increased productivity, real wages of employees increase and the prices of some products decrease. Therefore, the benefit of science and technology extends to the entire social system.

Market expansion

An important aspect of a successful economy is your ability to sell your excess production to other markets.

Advances in science and technology have led to new means of transportation and new methods of communication. This has effectively reduced distances and made international trade more accessible and efficient.

New sources of work

Historically, developments in science and technology have created new fields of work. For example, the first Industrial Revolution gave way to new professions related to mechanics and machine operation.

Today, with the Technological Revolution, many other relevant specialized professions have emerged.

Disadvantages

Technological dependency

Not all the impact of science and technology on the economy is positive. Technology has become a staple of all modern businesses. Therefore, production can be affected by failures in machinery or information systems.

Also, technological devices have become more advanced and complicated. When problems arise, only specialized professionals have the ability to solve them.

Loss of jobs

As science and technology advance, machines are replacing human capital. This happens especially in those jobs that do not require a particular specialization.

Thus, modern machines can carry out routine tasks in factories, which makes one or more salaried employees unnecessary. Unemployment deprives people of money that they could spend in the market, reducing their contribution to the economy.

On the other hand, workers displaced by technological advances may find it difficult to be rehired, as new jobs may require advanced skills that they do not possess.

Many researchers claim that automation will put a significant number of people out of work in the coming decades.

Unequal income distribution

A negative aspect of technological advance is its impact on income distribution. The fruits of economic growth have been unevenly distributed among countries.

Inequality between the rich and poor regions of the world, measured by per capita product, has increased dramatically over time. However, other alternative measures - such as life expectancy and education levels - show a smaller difference.

References

1. Encyclopædia Britannica. (2018, February 07). Industrial Revolution. Taken from britannica.com.
2. Allah, S. (2009, September 2). The technological revolution. Taken from britannica.com.
3. Farhadi, M.; Ismail, R. and Fooladi, M. (2012). Information and Communication Technology Use and Economic Growth. PLoS ONE, 7 (11).
4. Organization for Economic Co-operation and Development. (2000). Science, Technology and Innovation in the New Economy. Taken from oecd.org.
5. Dahlman, C. (s / f). Technology, globalization, and international competitiveness: Challenges for developing countries. Taken from un.org.
6. Organization for Economic Co-operation and Development. (s / f). Technology, productivity and job creation: best policy practices. Taken from oecd.org.
7. Moritz, K. (2017, February 13). How Does Technology Affect the Economy? Taken from rewire.org.
8. Vossos, T. (2017, September 26). Advantages & Disadvantages of Technology in Our Economy. Taken from bizfluent.com.
9. Metcalf, T. (2018, February 18). How Does Technology Affect Economics? Taken from bizfluent.com.