Impacts of Information Technology on Society in the New Century

Impacts of Information Technology on Society in the New Century




In the past few decades there has been a dramatical change in computing and communications, and all indications are that technological progress and use of information technology will continue at a rapid speed. Accompanying and supporting the emotional increases in the strength and use of new information technologies has been the declining cost of communications as a consequence of both technological improvements and increased competition. According to Moore’s law the processing strength of microchips is doubling every 18 months. These advances present many meaningful opportunities but also present major challenges. Today, innovations in information technology are having wide-ranging effects across numerous domains of society, and policy makers are acting on issues involving economic productivity, intellectual character rights, privacy protection, and affordability of and access to information. Choices made now will have long lasting consequences, and attention must be paid to their social and economic impacts.

One of the most meaningful outcomes of the progress of information technology is probably electronic commerce over the Internet, a new way of conducting business. Though only a few years old, it may radically alter economic activities and the social ecosystem. Already, it affects such large sectors as communications, finance and retail trade and might expand to areas such as education and health sets. It implies the seamless application of information and communication technology along the complete value chain of a business that is conducted electronically.

The impacts of information technology and electronic commerce on business models, commerce, market structure, workplace, labour market, education, private life and society as a whole.

1. Business Models, Commerce and Market Structure

One important way in which information technology is affecting work is by reducing the importance of distance. In many industries, the geographic dispensing of work is changing considerably. for example, some software firms have found that they can conquer the tight local market for software engineers by sending projects to India or other nations where the wages are much lower. Furthermore, such arrangements can take advantage of the time differences so that basic projects can be worked on nearly around the clock. Firms can outsource their manufacturing to other nations and rely on telecommunications to keep marketing, R&D, and dispensing teams in close contact with the manufacturing groups. consequently the technology can permit a finer division of labour among countries, which in turn affects the relative need for various skills in each nation. The technology enables various types of work and employment to be decoupled from one another. Firms have greater freedom to locate their economic activities, creating greater competition among regions in infrastructure, labour, capital, and other resource markets. It also opens the door for regulatory arbitrage: firms can increasingly choose which tax authority and other regulations apply.

Computers and communication technologies also promote more market-like forms of production and dispensing. An infrastructure of computing and communication technology, providing 24-hour access at low cost to almost any kind of price and product information desired by buyers, will reduce the informational barriers to efficient market operation. This infrastructure might also provide the method for effecting real-time transactions and make intermediaries such as sales clerks, stock brokers and travel agents, whose function is to provide an basic information link between buyers and sellers, redundant. Removal of intermediaries would reduce the costs in the production and dispensing value chain. The information technologies have facilitated the evolution of enhanced mail order retailing, in which goods can be ordered quickly by using telephones or computer networks and then dispatched by suppliers by integrated transport companies that rely extensively on computers and communication technologies to control their operations. Nonphysical goods, such as software, can be shipped electronically, eliminating the complete transport channel. Payments can be done in new ways. The consequence is disintermediation throughout the dispensing channel, with cost reduction, lower end-consumer prices, and higher profit margins.

The impact of information technology on the firms’ cost structure can be best illustrated on the electronic commerce example. The meaningful areas of cost reduction when carrying out a sale via electronic commerce instead of in a traditional store include physical formation, order placement and execution, customer sustain, strong, inventory carrying, and dispensing. Although setting up and maintaining an e-commerce web site might be expensive, it is certainly less expensive to continue such a storefront than a physical one because it is always open, can be accessed by millions around the globe, and has few variable costs, so that it can extent up to meet the need. By maintaining one ‘store’ instead of several, duplicate inventory costs are deleted. In addition, e-commerce is very effective at reducing the costs of attracting new customers, because advertising is typically cheaper than for other media and more targeted. additionally, the electronic interface allows e-commerce merchants to check that an order is internally consistent and that the order, receipt, and invoice match. by e-commerce, firms are able to move much of their customer sustain on line so that customers can access databases or manuals directly. This considerably cuts costs while generally improving the quality of service. E-commerce shops require far fewer, but high-skilled, employees. E-commerce also permits savings in inventory carrying costs. The faster the input can be ordered and delivered, the less the need for a large inventory. The impact on costs associated with decreased inventories is most distinct in industries where the product has a limited shelf life (e.g. bananas), is unprotected to fast technological obsolescence or price declines (e.g. computers), or where there is a rapid flow of new products (e.g. books, music). Although shipping costs can increase the cost of many products purchased via electronic commerce and add significantly to the final price, dispensing costs are considerably reduced for digital products such as financial sets, software, and travel, which are important e-commerce segments.

Although electronic commerce causes the disintermediation of some intermediaries, it creates greater dependency on others and also some thoroughly new intermediary roles. Among the intermediary sets that could add costs to e-commerce transactions are advertising, obtain online payment, and delivery. The relative ease of becoming an e-commerce merchant and setting up stores results in such a huge number of offerings that consumers can easily be overwhelmed. This increases the importance of using advertising to establish a brand name and consequently generate consumer familiarity and trust. For new e-commerce start-ups, this course of action can be expensive and represents a meaningful transaction cost. The openness, global reach, and without of physical clues that are inherent characteristics of e-commerce also make it unprotected to fraud and consequently increase certain costs for e-commerce merchants as compared to traditional stores. New techniques are being developed to protect the use of credit cards in e-commerce transactions, but the need for greater security and user verification leads to increased costs. A meaningful characterize of e-commerce is the convenience of having purchases delivered directly. In the case of tangibles, such as books, this incurs delivery costs, which cause prices to rise in most situations, thereby negating many of the savings associated with e-commerce and significantly adding to transaction costs.

With the Internet, e-commerce is rapidly expanding into a fast-moving, open global market with an ever-increasing number of participants. The open and global character of e-commerce is likely to increase market size and change market structure, both in terms of the number and size of players and the way in which players compete on international markets. Digitized products can cross the border in real time, consumers can shop 24 hours a day, seven days a week, and firms are increasingly faced with international online competition. The Internet is helping to enlarge existing markets by cutting by many of the dispensing and marketing barriers that can prevent firms from gaining access to foreign markets. E-commerce lowers information and transaction costs for operating on overseas markets and provides a cheap and efficient way to strengthen customer-supplier relations. It also encourages companies to develop inventive ways of advertising, delivering and supporting their product and sets. While e-commerce on the Internet offers the possible for global markets, certain factors, such as language, transport costs, local reputation, in addition as differences in the cost and ease of access to networks, attenuate this possible to a greater or lesser extent.

2. Workplace and Labour Market

Computers and communication technologies allow individuals to communicate with one another in ways complementary to traditional confront-to-confront, telephonic, and written modes. They permit collaborative work involving distributed communities of actors who seldom, if ever, meet physically. These technologies utilize communication infrastructures that are both global and always up, consequently enabling 24-hour activity and asynchronous in addition as synchronous interactions among individuals, groups, and organizations. Social interaction in organizations will be affected by use of computers and communication technologies. Peer-to-peer relations across department lines will be enhanced by sharing of information and coordination of activities. Interaction between superiors and subordinates will become more tense because of social control issues raised by the use of computerized monitoring systems, but however, the use of e-mail will lower the barriers to communications across different position levels, resulting in more uninhibited communications between supervisor and subordinates.

That the importance of distance will be reduced by computers and communication technology also favours telecommuting, and consequently, has implications for the residence patterns of the citizens. As workers find that they can do most of their work at home instead of in a centralized workplace, the need for homes in climatically and physically attractive regions would increase. The consequences of such a shift in employment from the suburbs to more far away areas would be profound. character values would rise in the favoured destinations and fall in the suburbs. Rural, historical, or charming aspects of life and the ecosystem in the newly attractive areas would be threatened. Since most telecommuters would be among the better educated and higher paid, the need in these areas for high-income and high-position sets like gourmet restaurants and clothing boutiques would increase. Also would there be an expansion of sets of all types, creating and expanding job opportunities for the local population.

By reducing the fixed cost of employment, extensive telecommuting should make it easier for individuals to work on flexible schedules, to work part time, to proportion jobs, or to keep up two or more jobs simultaneously. Since changing employers would not necessarily require changing one’s place of residence, telecommuting should increase job mobility and speed career advancement. This increased flexibility might also reduce job stress and increase job satisfaction. Since job stress is a major factor governing health there may be additional benefits in the form of reduced health costs and mortality rates. however one might also argue that technologies, by expanding the number of different responsibilities that are expected of workers and the range of skills needed to perform these responsibilities, might speed up work and increase the level of stress and time pressure on workers.

A question that is more difficult to be answered is about the impacts that computers and communications might have on employment. The ability of computers and communications to perform routine responsibilities such as bookkeeping more rapidly than humans leads to concern that people will be replaced by computers and communications. The response to this argument is that already if computers and communications rule to the elimination of some workers, other jobs will be produced, particularly for computer professionals, and that growth in output will increase overall employment. It is more likely that computers and communications will rule to changes in the types of workers needed for different occupations instead of to changes in total employment.

A number of industries are affected by electronic commerce. The dispensing sector is directly affected, as e-commerce is a way of supplying and delivering goods and sets. Other industries, indirectly affected, are those related to information and communication technology (the infrastructure that enables e-commerce), content-related industries (entertainment, software), transactions-related industries (financial sector, advertising, travel, transport). eCommerce might also create new markets or extend market reach beyond traditional borders. Enlarging the market will have a positive effect on jobs. Another important issue relates to inter linkages among activities affected by e-commerce. Expenditure for e-commerce-related intermediate goods and sets will create jobs indirectly, on the basis of the quantity of electronic transactions and their effect on prices, costs and productivity. The convergence of media, telecommunication and computing technologies is creating a new integrated supply chain for the production and delivery of multimedia and information content. Most of the employment related to e-commerce around the content industries and communication infrastructure such as the Internet.

Jobs are both produced and destroyed by technology, trade, and organizational change. These processes also underlie changes in the skill composition of employment. Beyond the net employment gains or losses brought about by these factors, it is apparent that workers with different skill levels will be affected differently. E-commerce is certainly driving the need for IT professionals but it also requires IT skill to be coupled with strong business application skills, thereby generating need for a flexible, multi-skilled work force. There is a growing need for increased integration of Internet front-end applications with enterprise operations, applications and back-end databases. Many of the IT skill requirements needed for Internet sustain can be met by low-paid IT workers who can deal with the organizational sets needed for basic web page programming. However, wide area networks, competitive web sites, and complicate network applications require much more skill than a platform-specific IT job. Since the skills required for e-commerce are scarce and in high need, e-commerce might accelerate the up skilling trend in many countries by requiring high-skilled computer scientists to replace low-skilled information clerks, cashiers and market salespersons.

3. Education

Advances in information technology will affect the craft of teaching by complementing instead of eliminating traditional classroom instruction. Indeed the effective instructor acts in a combination of roles. In one role the instructor is a supplier of sets to the students, who might be regarded as its customers. But the effective instructor occupies another role in addition, as a supervisor of students, and plays a role in motivating, encouraging, evaluating, and developing students. For any topic there will always be a small percentage of students with the necessary background, motivation, and self-discipline to learn from self-paced workbooks or computer assisted instruction. For the majority of students, however, the presence of a live instructor will continue to be far more effective than a computer assisted style in easing positive educational outcomes. The greatest possible for new information technology lies in improving the productivity of time spent outside the classroom. Making solutions to problem sets and stated reading materials obtainable on the Internet offers a lot of convenience. E-mail greatly simplifies communication between students and faculty and among students who may be engaged in group projects. Advances in information technology will affect the craft of teaching by complementing instead of eliminating traditional classroom instruction. Indeed the effective instructor acts in a combination of roles. In one role the instructor is a supplier of sets to the students, who might be regarded as its customers. But the effective instructor occupies another role in addition, as a supervisor of students, and plays a role in motivating, encouraging, evaluating, and developing students. For any topic there will always be a small percentage of students with the necessary background, motivation, and self-discipline to learn from self-paced workbooks or computer assisted instruction. For the majority of students, however, the presence of a live instructor will continue to be far more effective than a computer assisted style in easing positive educational outcomes. The greatest possible for new information technology lies in improving the productivity of time spent outside the classroom. Making solutions to problem sets and stated reading materials obtainable on the Internet offers a lot of convenience. E-mail greatly simplifies communication between students and faculty and among students who may be engaged in group projects.

Although distance learning has existed for some time, the Internet makes possible a large expansion in coverage and better delivery of instruction. Text can be combined with audio/ video, and students can interact in real time via e-mail and discussion groups. Such technical improvements coincide with a general need for retraining by those who, due to work and family demands, cannot attend traditional courses. Distance learning via the Internet is likely to supplement existing schools for children and university students, but it could have more of a substitution effect for continuing education programmes. For some degree programmes, high-prestige institutions could use their reputation to attract students who would otherwise attend a local facility. Owing to the Internet’s ease of access and convenience for distance learning, overall need for such programmes will probably expand, leading to growth in this part of e-commerce.

As shown in the past section, high level skills are vital in a technology-based and knowledge intensive economy. Changes associated with rapid technological advances in industry have made constant upgrading of specialized skills an economic necessity. The goal of lifelong learning can only be achieved by reinforcing and adapting existing systems of learning, both in public and private sectors. The need for education and training concerns the complete range of modern technology. Information technologies are uniquely capable of providing ways to meet this need. Online training via the Internet ranges from accessing self-study courses to complete electronic classrooms. These computer-based training programmes provide flexibility in skills acquisition and are more affordable and applicable than more traditional seminars and courses.

4. Private Life and Society

Increasing representation of a wide variety of content in digital form results in easier and cheaper duplication and dispensing of information. This has a mixed effect on the provision of content. On the one hand, content can be distributed at a lower unit cost. however, dispensing of content outside of channels that respect intellectual character rights can reduce the incentives of creators and distributors to produce and make content obtainable in the first place. Information technology raises a large number of questions about intellectual character protection and new tools and regulations have to be developed in order to solve this problem.

Many issues also surround free speech and regulation of content on the Internet, and there continue to be calls for mechanisms to control objectionable content. However it is very difficult to find a sensible solution. Dealing with indecent material involves understanding not only the views on such topics but also their evolution over time. Furthermore, the same technology that allows for content altering with respect to decency can be used to filter political speech and to restrict access to political material. consequently, if censorship does not appear to be an option, a possible solution might be labelling. The idea is that consumers will be better informed in their decisions to avoid objectionable content.

The rapid increase in computing and communications strength has raised important concern about privacy both in the public and private sector. Decreases in the cost of data storage and information processing make it likely that it will become practicable for both government and private data-mining enterprises to collect detailed dossiers on all citizens. Nobody knows who currently collects data about individuals, how this data is used and shared or how this data might be misused. These concerns lower the consumers’ trust in online institutions and communication and, consequently, hinder the development of electronic commerce. A technological approach to protecting privacy might by cryptography although it might be claimed that cryptography presents a serious obstacle to criminal investigations.

It is popular wisdom that people today suffer information overload. A lot of the information obtainable on the Internet is incomplete and already incorrect. People use more and more of their time absorbing irrelevant information just because it is obtainable and they think they should know about it. consequently, it must be studied how people assign credibility to the information they collect in order to invent and develop new credibility systems to help consumers to manage the information overload.

Technological progress inevitably creates dependence on technology. Indeed the creation of vital infrastructure ensures dependence on that infrastructure. As surely as the world is now dependent on its transport, telephone, and other infrastructures, it will be dependent on the emerging information infrastructure. Dependence on technology can bring risks. Failures in the technological infrastructure can cause the collapse of economic and social functionality. Blackouts of long-distance telephone service, credit data systems, and electronic funds move systems, and other such vital communications and information processing sets would undoubtedly cause extensive economic disruption. However, it is probably impossible to avoid technological dependence. consequently, what must be considered is the exposure brought from dependence on technologies with a recognizable probability of failure, no workable substitute at hand, and high costs as a consequence of failure.

The current computing and communications dramatical change has numerous economic and social impacts on modern society and requires serious social science investigation in order to manage its risks and dangers. Such work would be valuable for both social policy and technology design. Decisions have to be taken carefully. Many choices being made now will be costly or difficult to modify in the future.




leave your comment

Top