TECHNOLOGICAL ENVIRONMENT

Technology refers to methods, systems, and devices which are the result of scientific knowledge being
used for practical purposes. It is the scientific process of converting the inputs into finished goods. With
the change of the time, technology is changing fast. Technology used today will be obsolete tomorrow.
Technological environment refers to the state of science and technology in the country and related
aspects such as rate of technological progress, institutional arrangements for development and
application of new technology, etc.

According to the well known economist J.K. Galbraith, technology means, “systematic application of
scientific or other organised knowledge to practical tasks”.

Technology comprises of both machines (hard technology) and scientific thinking (soft technology) used
to solve problems and promote progress. It consists of not only knowledge and methods required to
carry on and improve production and distribution of goods and services but also entrepreneurial
expertise and professional know how. Technology includes inventions and innovations.

The main features of technological environment are as follows :

 Technological environment is a component of macro or indirect action environment.

 Technological environment changes very fast.

 Technological environment affects the manner in which the resources of the economy are
converted into output.

 Technological environment is self reinforcing. An invention in one place leads to a sequence of

1)Level of technology: The level of technology can be appropriate or sophisticated.It can be labour-
based or capital-based. The level of technology influence organizations.

 Labour based technology: Human labour is mainly used for the operations.

 Capital based technology: Machinery is mainly used for operations. Technology is represented
by automation, computerization, robotizing etc.

2)Pace of technological change :Technology is a dynamic force. Its speed of change is

Technological change influences organizations in the following :

 It can rejuvenate the existing industries through product improvements or cost reductions.
  It can create entirely new industries.

 It can increase government regulations.

3)Technological transfer :Sources of technology can be within the organization ,within the country or
foreign countries.Technology transfer implies technology import for organizations.
Technological transfer implies technology imported from technologically advanced foreign countries.Its
speed is important for organizations.

 Globalization :Global companies are the the key sources of technology transfer in developing
nations.

 Projects :Turn key projects based on global bidding serve as a source of technology transfer.

 Trade :This consists of sale of equipment or machines by the manufacturer.

 Technical assistance :Bilateral and multilateral donors under technical assistance provide
international consultants who bring new technology with them.

 Training and publication :They provide opportunities to about new technology.

Technological transfer influences organization by :

 Increasing efficiently and decreasing costs.

 New product development and product improvement.

 Improving production systems and processes.

 Better satisfaction of customer needs.

4)Research and development :R&D is the essence of innovation.Expectation for improvement are
increasing.Customers expect new products of superior quality which are safe,comfortable and
environment friendly.This calls for increase research and development budget by
organizations.Government and industry collaboration and spending in R&d efforts is also an important
aspect of technology environment.

EMERGING BUSINESS ENVIRONMENT.

The business environments in Nepal have changed significantly over the years. Globalization and
emergence of information technology have exerte d massive impact on the business environment in
Nepal. Significant changes may be notices in economic, political, socio-cultural, technological and legal
environment of business in Nepal. In such a situation, the emerging business environment in Nepal may
be explained in the following points:

The business environments in Nepal have changed significantly over the years. Globalization and
emergence of information technology have exerted massive impact on the business environment in
Nepal. Significant changes may be notices in economic, political, socio-cultural, technological and legal
environment of business in Nepal. In such a situation, the emerging business environment in Nepal may
be explained in the following points:

Increased private investment:

Core businesses are those businesses that need heavy investment high level of managerial capability.
Some of the core businesses in Nepal are electricity, communication, transportation. These businesses
were conducted only by the government before the government pursued the liberalization policy. After
liberalization, the private sectors investments in these businesses have growth up significantly.

Growing urban population:

Urbanization refers to the process of growth in the proportion of population living in urban areas. The
concept of urbanization has been related to specialization, industrialization and consequent economic
development. The rate of urbanization has been growing in Nepal over the years. Urban population
growth in Nepal was last measured at 3.11 percent in 2013, according to the World Bank. The urban
population of Nepal was 13.4 percent in 2000. However, it reached to 18.2 in 2010.

With growing urbanization, business opportunities in Nepal have also increased. The urban population
normally has higher spending capacity.

Rising informed and educated customers:

In Nepal, the education level of the people is increasing. Education enhances income. It also determines
consumer behavior. According to the census 2011, the literacy rate of Nepal is 65.9 percent which is
higher by 11.8 percent of the previous census.

Similarly, with access to information technology, the customers are being more informed.

Changing role of the government:

With liberalization and globalization the role of the government is changing to the facilitator from the
regulator. The intervention of the government in the economic activities is gradually decreasing over the
years. The government has been working towards providing infrastructures for the development of
business sector in Nepal. The government has brought private sector friendly laws and policy.

Rising economic agenda:

In Nepal, the political issues dominated the economic issues over a long period of time. Democracy and
human right were the frequently discussed issues in the country. However, economic issues seem to
have got momentum to some extent after 2063. The draft of the new constitution 2072 has given due
emphasis to the private sector for economic development of the country. Momentum of economic
issues creates a favorable situation for the development of trade and business in Nepal.

Use of modern technologies:

The level of technology adopted by the Nepalese business organizations is increasing over the years. The
manufacturing industries are cement, iron, food etc. have started using modern computer based
technologies. Similarly, the financial institutions in Nepal are found to use comparatively modern
technology. The use of information technology is increasing in Nepalese service sectors. The educational
institutions and hospitals are using latest technology in their operation. Use of technology prepares the
Nepalese business organizations to face competition at national as well as global level. For example,
most of the financial sectors use information technology to provide e-banking services to the customers.

Integration to the world economy:

Nepal has been following the liberalization policy since 1990. It has become the member of the regional
organizations such as SAARC and BIMSTEC. Similarly, it also got the membership of WTO. These are the
efforts of Nepal to integrate its economy to the global economy. Nepal can have ample of benefits
through this in terms of market expansion. However, the Nepalese organizations are likely to face severe
competition as well. The open market policy by the government has supported the trade diversification.

Growth of service sector

The socio cultural values are found to shift significantly over the years. The banks, insurance companies
are other financial institutions have grown up rapidly over the years. Similarly, other service sectors as
hospitals, schools and colleges, consultancy services, entertainment, hotels and travel agencies have
also growth up in recent years.

Workforce diversity:

Workforce diversity is increasing in Nepalese is being diverse over the years due to age, gender and
ethnicity. Diversity is viewed positively due to cost reduction, marketing, creativity and flexibility.
However, it may also be the source of conflict within organization.