UNIT 05: INFORMATION TECHNOLOGY AND EMERGING TRENDS

OUTLINE
UNIT 5: INFORMATION TECHNOLOGY AND EMERGING TRENDS
I. Industrial revolutions
A. First industrial revolution (1765)
B. Second industrial revolution (1870)
C. Third industrial revolution (1969)

II. It and Productivity

A. General-Purpose Technology (GPT)
B. Percentage Increase in Productivity
C. Division of Labor and Productivity
D. Prices and Industrial Change
E. Industry Life Cycle
F. Game-Changing Technologies

III. The Platform Economy

A. Definition of a Platform
B. Features of a Platform
C. The Platform Model

INDUSTRIAL REVOLUTIONS- A period of development in the latter half of the 18th century, where there is change

from one economy to another.

INVENTION is the discovery of new products and processes.

INNOVATION is the commercialization and improvement of the existing products.

First Industrial Revolution – 1765

(Britain) England in Late 18th Century, focused on textile manufacturing.

Significant evolutions: Cort’s puddling; rolling process for making iron, Crompton’s mule for spinning cotton, Watt

steam engine.

● Products / Services – Vegetables, Coal, Iron, Discovery of chemicals

● Transportation – Railroads, Basic farming

● Production System – Manual Labor to mechanical

● Communication - Printed materials

Second Industrial Revolution- 1870

Significant evolution: Development of electricity, Internal-combustion engine, Railway, Chemical industry

Products / Services – electricity, chemicals, petroleum, steel

Transportation – automobiles, aircrafts

Production System – machine-aided equipment

Communication – telephone, telegraph

Third Industrial Revolution – 1969

Started with the development of transistors and the rise of electronics and digital technology.

Products / Services – Internet, rise of electronics, source of energy: nuclear power.

Production System – Automation

IT AND PRODUCTIVITY

The concept of a General-Purpose Technology (GPT)

 GPT- technology of wide application used in various industries and whose impact is strong on their

functioning.

Main Characteristics

1. Wide scope for improvement and elaboration.

2. Applicable across a broad range of uses. (Use not restricted to one industry)

3. The technology does not only replace existing methods but also works with them, ensuring an even broader

impact on the systems of production and distribution.

PRODUCTIVITY- Productivity is the quality of producing something. Measure of efficiency.

PERCENTAGE INCREASE IN PRODUCTIVITY

1. The Following Year – The Base Year

2. Divided by the Base Year

3. Multiply to 100 (Convert the Answer to Percentage)

DIVISION OF LABOR AND PRODUCTIVITY

 Productivity increases when the division of labor increases.

 Increases in productivity can lead to higher incomes for an economy's citizens.

 If increases in wages are linked to increases in productivity, then workers’ wages may also rise (or, at least,

their employment prospects may be more secure).

PRICES AND INDUSTRIAL CHANGE

The concept of the price index. Indices are used a lot in economics. They are basically a simple way of measuring

change.

PRICE INDEX is a measure of the average level of prices for some specified set of goods and services, relative to

the prices of a specified base period. The most widely used method of constructing an index is based on the notion of

the percentage.

The Following Price in Year 2 divided by the Price in Year 1 (Base Year) answer is multiplied by 100.

CHANGES IN INDUSTRY STRUCTURE

The way in which power is distributed among firms. This can be described by factors such as the number of firms in

the industry and the distribution of market shares.

The sustainability of productivity in economies and the concept of the INDUSTRY LIFE CYCLE. Economies go

through cycles of rapid growth (boom) followed by slowdowns (recession). The industry life cycle focuses on factors

that influence the birth, growth, and decline of firms within an industry. These factors include the number and size of

firms, ease of entry, technological changes, and pricing trends. The industry life cycle consists of phases: pre-market,

introductory, growth, and mature phases.

GAME CHANGING TECHNOLOGIES

Additive Manufacturing - digitally controlled devices to add layer on layer of material(s) to create objects from 3D

digital models. industrial sector such as architectural, medical, dental, aerospace, automotive, furniture and jewelry.

Industrial Internet of Things - use of connected sensors attached to different objects throughout the production

process to feed live data to central computers, usually seen on the factory floor.
Electric Vehicles - vehicles whose main system of propulsion depends on (externally generated) electricity rather

than fuel. (e.g. Tesla)

Industrial Biotech - the use of biological processes of living organisms for industrial purposes, drawing on recent

scientific insights such as systems genomics and metabolomics. Uses enzymes and microorganisms to make bio-

based products in sectors such as chemicals, food ingredients, detergents, paper, textiles, and biofuels.

Effects of Game Changing Technologies

1. Increasing centrality of (digital) information – information as a key source value

2. Mass Customization – flexible production process with interconnecting objects

3. Servitization – technologies involve the gradual replacement of manufacturing as traditionally understood by a type

of economic activity that is closer to the traditional concept of services

4. Increased Labor/Resource Efficiency – more efficient use of materials and energy in production

Effects of Game Changing Technologies on Work and Employment

1. Upgrading of occupations

2. Higher level of ICT competence

3. Decline of repetitive and routine industrial work brought about by digital factories

THE PLATFORM ECONOMY

A platform is a business that connects people through technology, making an ecosystem that allows value to be

created and exchanged.

Platforms don’t own the resources that create value, they can grow much faster than pipeline businesses. These

businesses make up a platform-based economy. Some key features of a platform will include:

● Using sophisticated logistics software for matching and payment

● Providers on the platforms are independent contractors

● Very low barriers to entry for providers on most platforms

● Trust is achieved via crowdsourcing of ratings and reputational data.

PLATFORM MODEL

The platform model shows three (03) components:

● platform - controller of the channel or platform and arbiter of the participants in the platform

● consumers/customers - buyers or users of the outputs offered through the platform

● producers/providers - supplier of the outputs sold through the platform