There has been a revolution in computing and communications over the past few decades, and all the signs show that technological advances and the use of information technology will continue at a rapid pace. Accompanying and supporting the dramatic increase in the power and use of new information technologies has been the reduction in telecommunication costs as a result of technological advancements and increased competition. According to Moore’s Law, the processing power of a microchip doubles every 18 months. While these developments present many important opportunities, they also pose great challenges. Innovations in information technology today have far-reaching impacts across many areas of society, and policy makers are taking action on issues related to economic productivity, intellectual property rights, privacy, and the economics and access of information. The choices you make now will have lasting consequences and you need to pay attention to the social and economic impacts.
Perhaps one of the most important outcomes of advances in information technology is e-commerce over the Internet, a new way of doing business. It was only a few years ago, but it could radically change economic activity and the social environment. It already affects large sectors such as telecommunications, finance and retail trade, and could expand into areas such as education and health care. This means the seamless application of information and communication technologies across the entire value chain of a business conducted electronically.
The impact of information technology and e-commerce on business models, commerce, market structures, the workplace, the labor market, education, privacy and society in general.
1. Business model, commerce and market structure
One important way information technology is impacting work is by reducing the importance of distance. In many industries, the geographic distribution of work is changing significantly. For example, some software companies have found that they can overcome a narrow regional market for software engineers by sending their projects to India or other countries where wages are much lower. In addition, these deployments can take advantage of the time difference to complete critical projects almost 24 hours a day. Businesses can outsource manufacturing to other countries and rely on communications to keep marketing, R&D, and distribution teams in close contact with manufacturing groups. This technology thus enables a fine-grained division of labor between countries, which in turn affects the relative demand for different skills in each country. This technique allows you to separate different types of work and employment from each other. Businesses have more freedom to find economic activity, increasing competition between regions in markets for infrastructure, labor, capital and other resources. It also opens the door to regulatory arbitrage. Companies are increasingly being able to choose which tax authorities and other regulations apply.
Computers and communication technologies also facilitate more market-like forms of production and distribution. An infrastructure of computing and communication technologies that provides low-cost, around-the-clock access to virtually any kind of price and product information buyers want will reduce information barriers to efficient market operation. This infrastructure can also render intermediaries such as salespeople, stockbrokers and travel agents unnecessary, providing the means to conduct real-time transactions and providing essential informational links between buyers and sellers. Eliminating intermediaries reduces costs in production and distribution value chains. Information technology is accelerating the evolution of improved mail-order retail, where goods can be quickly ordered using a telephone or computer network and then shipped by suppliers through integrated shipping companies that rely extensively on computers and communication technologies to control their operations. I did. Non-physical goods such as software can be shipped electronically, eliminating the need for a full shipping channel. You can pay in a new way. The result is decentralization across distribution channels with cost savings, lower end-consumer prices, and higher margins.
The impact of information technology on a company’s cost structure can best be illustrated with the example of e-commerce. Key areas of cost savings when conducting sales through e-commerce rather than traditional stores include physical installation, order placement and execution, customer support, hauling, and inventory carrying and distribution. Setting up and maintaining an ecommerce website can be expensive, but maintaining these stores is definitely cheaper than a physical store because they are always open, accessed by millions around the world, and have virtually no variable costs. It can scale to meet demand. By maintaining one ‘shop’ rather than multiple, redundant inventory costs are eliminated.
