The impact of science and technology on the economy it has been very marked, especially since the last decades of the 18th century. From 1760 to 1840 approximately, 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.
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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.
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 made it possible to power 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 distances, enabling communication and coordination of activities in space and the expansion of markets..
Technological change drives long-term economic growth, productivity, and improved 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, wool factories shut down the cottage industries that operated handlooms..
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, the 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..
An important aspect of a successful economy is its ability to sell its 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..
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..
At present, with the Technological Revolution many other relevant specialized professions have emerged.
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.
As science and technology advance, machines are replacing human capital. This occurs 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 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.
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 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.
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