In sequence Technology can lead to new or improved products and services, or to new ways of producing existing products and services. That is, information technology accelerates economic development into two leading ways such as:
a. Product Innovation
b. Process Innovation.
Produce modernization
New 'products' such as personal computers, calculators, electronic games and computerized search services, have largely provided new employment opportunities. On the other hand, enhanced 'products', such as point-of-sale terminals instead of cash registers, word processors instead of typewriters, have both created and destroyed employment..
Method modernization
The major concern has been with the effects of information technology in providing new processes for the creation of existing products and services. Fully automated factories and electronic offices are the finest examples of a general move towards microelectronics in the production process, such as the progressive use of direct numerically controlled (DNC) machine tools.
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Wall estimated that every silver collar worker in industry today replaces three workers on average, and that by the mid 1990s the second generation of 'intelligent' robots, with heightened sensory powers, will each replace between five and ten workers in certain assembly jobs. However, economic analysis supports the inevitability of high levels of Technological Unemployment following from Process Innovation. This phenomenon can be explained with the help of the following two aspects:
a. Level of Employment and
b. Structure of Employment
Level of Employment
A typist with word processor rather than typewriter can produce more, better-edited, text per tune period. Higher output per unit of factor input reduces costs of production, provided only that wage rates and other factor price increases do not absorb the whole of productivity gain. Lower costs will cause the profit maximizing firm to lower price and raise output under most market forms. Therefore, the final employment outcome for a firm with Process Innovation will depend on:
1. The relationship between new technology and Labor productivity;
2. The relationship among Labor efficiency and cost;
3. The connection among cost and price;
4. The relationship between lower price and higher demand;
Structure of service
Whatever the effect of information technologies upon the level of employment, it is generally recognized to there will be a new pattern of skill requirement. Of course, the modify in skill profile will vary from one application to another. It will depend in part upon the character of the Replaced Technology. To verify this statement, some broad trends are already in evidence:
1. Within industrial production, a reduced proportion of Blue-collar workers engaged upon low-skilled activities, such as assembly work.
2. Within the service sector, a reduced proportion of the more routine, information-handling occupations, such as lower-skilled clerical employees.
3. An increased proportion of occupations providing infrastructure support in the form of installing, operating, and repairing the new machines and technologies.
However, as a rule of thumb, higher level of skills seems to be required in both office and factory.(A latest profitable Philosophy)
