The Determining Factor Whether Technology Decides That Labor and Capital Should Be Exchanged For Technological Enhancements
In times when technology dictates that more of the labor force must be employed in a fewer number of positions, more of the available money in the economy must be diverted toward fixed assets to finance capital investments: Deflationary Recession. The effects of this are myriad. More of the workforce must be employed at lower wages to offset the higher cost of living. This means that savings must be sought by reducing other expenses: food, entertainment, etc…
If technology dictates that capital and labor must be utilized in fixed proportions, a decline in the cost of goods will create a situation wherein the demand for capital is less than the supply: Type A. This type of economic environment calls for immediate adjustments in business infrastructure: Research and development, investment in equipment and facilities, restructuring of business processes, and reduction in prices. If, on the other hand, technology is one of the drivers of value creation and growth in a market, then changes in technology may tend toward increasing the demand for goods and services while decreasing the supply of potential workers. Type B, which can result from increased productivity, can result in a gain in income as well as employment.
The demand side of the business equation can be greatly affected if technology is changing the face of the business world. Defined as the introduction of new or altered technologies, this is typically a result of external factors. The most common are globalization, changes in government, adoption of new technology by competitors, and investment in research and development. There are some industries, such as information technology, that are almost entirely immune to external influences, yet still need capital investments in order to remain viable.
One industry that faces the dual implications of technology and globalization is telecommunications. As technology improves in the field of communications, telecommunications companies must make investments in networks, servers, switches, and other technology to support their operations. If these investments are not made, it could result in lower revenues. If technology dictates that capital and labor should be exchanged for technological improvements, this should be no cause for concern.
The other side of the business-capital relationship if technology dictates that labor and capital should be exchanged for technological improvements. For instance, the advent of the Internet and other digital technologies has meant that the physical distribution of printed materials has been changed. The cost of production has been reduced because of advances in technology. Additionally, the increased efficiency of computers and other digital devices means that increased production needs fewer employees to support the increased output. In a sense, capital is becoming less important as the returns from technological improvements become more prominent.
One industry that faces this issue if technology dictates that labor and capital should be exchanged for technological improvements is the information technology industry. Computers and other information technology products have changed the way people think about how they work, as well as the way they live. As a result, information technology has become an important part of society, with jobs ranging from computer programming to secretarial work. As the demand for these positions increases, more people will have the opportunity to own a stake in the emerging information technology industry.
The second question is whether technology should determine whether labor and capital should be exchanged for technological improvements. The first answer is no. The second answer is that it depends on whether the technological improvement is positive for society. Technological improvements that reduce costs and increase productivity are always beneficial to society. This makes labor less important, while increased leisure time, more leisure time, and increased prosperity are all positive for society. Therefore, whether technology dictates that labor and capital should be exchanged for technological improvements depends on whether technological improvements are good for society.
The third question to ask yourself when asking the question whether technology should determine that labor and capital should be exchanged for technological improvements is whether technology should affect how you decide how to live your life. Although many technological advances have led to greater leisure time, greater opportunities for leisure time, and greater equality of opportunities and wages, some people are still stuck living from hand to mouth. In this type of situation, whether technology dictates that labor and capital should be exchanged for technological improvements depends on whether people are willing to accept living in a way that may have been invented long before the advent of technology. If people do not accept the existence of something before technology, then technology cannot change that which humans have traditionally called “the norm.” However, if people are willing to accept changes that have been made by technology, then whether or not technology should determine that labor and capital should be exchanged for technological improvements depends on whether people can change their lifestyle to match that of the technological innovations.