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Technological Factors in Business: Definition & Concept

Technological Factors in Business: Definition & Concept
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  • 0:01 Technological Framework
  • 1:28 Technological Effects
  • 2:12 A Cautionary Tale
  • 3:13 Lesson Summary
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Lesson Transcript
Instructor: Shawn Grimsley
Technology permeates the internal and external environments of a business and can transform a business into a success or failure. In this lesson, you'll learn about technological factors in business.

Technological Framework

Technology is a broad term that refers to the means by which we can adapt to our environment, control our environment, and even change it. You can break technology down into two broad categories: products and processes. Technological products are meant for consumer consumption, while technological processes are a means to make and improve products and services. An example of a technological product is a new innovative game console with technological features not seen on the market before, while an example of a technological process is a new way to manufacture faster microchips. You also need to understand that technology is not science but rather the practical application of science.

Technological change is advancement in the 'art' of making products or in the development of processes. Technological change can be either incremental or radical. Incremental change can be thought of as an evolutionary process where you change, modify, refine, or improve a product or process. Radical change can be thought of as revolutionary, where completely new products and processes are designed. Radical technological change can rock the foundation of the world. Probably the most important radical technological change in the world was the invention of agriculture. A more recent radical change is the development of the Internet.

Technological Effects

Advances in technological processes provide many advantages. Technological innovations in processes can improve productivity and efficiency that will reduce costs and improve profit margins. It can make a business more competitive. Innovation in technological processes can also make products possible that were otherwise impossible with older technology. One only needs to look at the computer industry and compare processing abilities from a few years ago to what's available today to see evidence of this. Thus, technology permits the development of new products and markets that can lead to economic growth. For example, the rise of the Internet and smart phones has launched entire new industries.

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