What are the basic economics if the computer hardware and software industries? How do they make and spend money?
“If economic growth feeds on knowledge and innovation, current advances stem largely from the computer industry, a force of innovation devoted chiefly to the generation and use of knowledge.” – George Gilder
The computer hardware and software industry is constantly changing and updating at a pace that can completely innovate the computer industry itself as well as dramatically change other industries with its constant updates in technology. Since technology directly relates to computers and their software, innovations in technology can completely shift the computer software and hardware industries because computers are a form of technology. Technology is a major factor in what can change the supply and demand of almost any product. It’s important for computer software and hardware companies to keep up with technological advances and trends to become (and stay) profitable. If a commuter company fails to keep up with advances in their industry then their whole company struggles and they lose money. Computer software and hardware companies spend money on research to keep up with changing technologies as well as advertising, production costs and employee wages, among other things.
source: http://www.econlib.org/library/Enc1/ComputerIndustry.html
When dicussing the economics, we will need to analyse and evaluate the impact certain decisions made in this industry have on the macro and micro economics. For example, the increase in people being more technologically advanced results in there being more job opportunities in the Computer Hardware and Software industry. The employment level here is high, but then, it means that there is high level of unemployment in other industries. Microeconomics is focusing on the demand of the product and the supply. As the society now is more technologically advanced, there is high demand for hardware and software, thus the organisations are catering to these needs through the production of innovated products.
ReplyDeleteI really like how you talk about how technology impacts our industry in such a specific way. I think that it is important to expand upon this idea in our final presentation as changes in technology result directly in a change in the supply and demand within our industry.
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