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It's Time!

The Effects of Technology on Economics

by: Harvey Birdman


Technology has dramatically changed the face of economics by reorienting the economy from industrial to service-oriented. Computer technology created the information sector, and the greater increased efficiency of transportation infrastructure has made labor arbitrage a viable tactic for even small businesses. Automated trading programs have allowed nonhuman actors to profit from market fluctuations so that capital can be accumulated 24/7 and finally, production costs are greatly lower due to the robotization of assembly lines.



Service Oriented Economy


The biggest change in economics caused by technology is the shift from a manufacturing-based economy to a service-oriented one. Before the invention of the Internet, services like accounting or writing had to be transmitted by mail, which resulted in significant time lag -- enough to make it uneconomical for some businesses. By having instantaneous information, service-based industries were able to expand to the entire country and grow rapidly. For example, investors can now contact trading firms via website instead of having to meet an actual broker.

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