The internet technology sector is fundamentally restructuring business practices all over the world and innovations in IT have increased the efficiency of day to day business operations. This has allowed businesses to cut costs by delivering services or parts just in time. This further helps businesses meet consumer needs and demands more quickly and efficiently. In other words, IT has drastically transformed the exchange between buyers and sellers. Take Amazon for example, A multi-billion dollar web based company using the internet to sell and deliver large quantities of whatever type of good is demanded without the consumer having to ever physically go past their doorstep. Or take Khan Academy, who’s offering help to students all over the world through the internet. In the past decade, IT has improved significantly and helped provide countless benefits in many other parts of the economy.
There has been a boom in social media platforms in the last ten years and social networks like Instagram, Twitter, Facebook, and even LinkedIn are being used more than ever before for both personal and business use to rapidly communicate information to users in real time. These social media platforms become a one stop shop for free information, capturing user’s attention and paving the way for social media and further digital marketing.
Reverse outsourcing has also become a trend in the past decade with the due shift in globalization to cheap job markets in third world countries where mass production can take place at minimum costs. However as of recently due to the Covid-19 outbreak, more jobs are being sought out in the west and this type of offshoring may soon be replaced with a redistribution of labor alongside the boom of online retailers and e-commerce within the past year. Applications of new IT based digital technologies have boosted labor productivity as well as annual GDP, leading to higher success rates and ultimately an improved standard of living.
The IT revolution is the driving force behind the rapid decline in cost and sharp rise in the processing power of digital technologies and greater investment. Rapid advancements in fiber optic technologies within the past decade have also been extremely critical to the technological revolution. In simple words, fiber optics enables data to be converted into pulses of light and transmitted at high speeds through glass cables, and this boosts the speed and capacity of telecommunication networks.
Another major contributing factor to the growth of the tech sector is an increase in human capital, which is the workforce. Human capital drives the advancements in the industry and is more often than not the reason why one company may be more successful than another. This is because successful tech companies level the baseline of production of new technologies on new areas of improvement and therefore technological firms seek skilled workers with both knowledge and problem solving skills. In other words, they are on the hunt for something to give them an edge over the competition, also known as the “war in technology”, where firms are fighting to be at the top of the IT food chain where firms with the most efficient and up to date technologies are leading the way.
The spread of digital technology has also been driven by numerous aspects of information, which initially serves as the principal product and input of the majority of the IT industry. In comparison to more tangible products like consumer goods whose consumption of one piece of that good affects the benefit another may gain from it, when one person consumes information it does not necessarily reduce the possibility of someone else benefitting from the same piece of information. Furthermore, neworks are built on the exchange of information (the internet for example) tend to be a more worthy asset to existing users as more and more users become a part of it. This is because the more users there are, the more knowledge and information is available for other users.
Unprecedented labor productivity growth conjugated with a rapid rise in internet usage on both the business and individual level has prompted many to believe the global economy is evolving into a newer and more efficient one with IT being the core backbone. Higher rates of productivity, more versatile and flexible firms, and a feasible reduction in the ups and downs of the business cycle characterize this new economy. Not only has IT paved the way for newer and more efficient ways of work, but it has also reduced the catalyst of failure in many markets.