In the past few decades there has been a
revolution in computing and communications, and all indications are that
technological progress and use of information technology will continue at a
rapid pace. Accompanying and supporting the dramatic increases in the power and
use of new information technologies has been the declining cost of
communications as a result of both technological improvements and increased
competition. According to Moore's law the processing power of microchips is
doubling every 18 months. These advances present many significant opportunities
but also pose major challenges. Today, innovations in information technology
are having wide-ranging effects across numerous domains of society, and policy
makers are acting on issues involving economic productivity, intellectual
property rights, privacy protection, and affordability of and access to
information. Choices made now will have long lasting consequences, and
attention must be paid to their social and economic impacts.
One of the most significant outcomes of the
progress of information technology is probably electronic commerce over the
Internet, a new way of conducting business. Though only a few years old, it may
radically alter economic activities and the social environment. Already, it
affects such large sectors as communications, finance and retail trade and
might expand to areas such as education and health services. It implies the
seamless application of information and communication technology along the
entire value chain of a business that is conducted electronically.
The impacts of information technology and
electronic commerce on business models, commerce, market structure, workplace,
labour In the past few decades there has been a revolution in computing and
communications, and all indications are that technological progress and use of
information technology will continue at a rapid pace. Accompanying and
supporting the dramatic increases in the power and use of new information
technologies has been the declining cost of communications as a result of both
technological improvements and increased competition. According to Moore's law
the processing power of microchips is doubling every 18 months. These advances
present many significant opportunities but also pose major challenges. Today,
innovations in information technology are having wide-ranging effects across
numerous domains of society, and policy makers are acting on issues involving
economic productivity, intellectual property rights, privacy protection, and
affordability of and access to information. Choices made now will have long
lasting consequences, and attention must be paid to their social and economic
impacts.
One of the most significant outcomes of the
progress of information technology is probably electronic commerce over the
Internet, a new way of conducting business. Though only a few years old, it may
radically alter economic activities and the social environment. Already, it
affects such large sectors as communications, finance and retail trade and
might expand to areas such as education and health services. It implies the
seamless application of information and communication technology along the
entire value chain of a business that is conducted electronically.
The impacts of information technology and
electronic commerce on business models, commerce, market structure, workplace,
labour market, education, private life and society as a whole.
1. Business Models, Commerce and Market
Structure
One important way in which information
technology is affecting work is by reducing the importance of distance. In many
industries, the geographic distribution of work is changing significantly. For
instance, some software firms have found that they can overcome the tight local
market for software engineers by sending projects to India or other nations
where the wages are much lower. Furthermore, such arrangements can take
advantage of the time differences so that critical projects can be worked on nearly
around the clock. Firms can outsource their manufacturing to other nations and
rely on telecommunications to keep marketing, R&D, and distribution teams
in close contact with the manufacturing groups. Thus the technology can enable
a finer division of labour among countries, which in turn affects the relative
demand for various skills in each nation. The technology enables various types
of work and employment to be decoupled from one another. Firms have greater
freedom to locate their economic activities, creating greater competition among
regions in infrastructure, labour, capital, and other resource markets. It also
opens the door for regulatory arbitrage: firms can increasingly choose which
tax authority and other regulations apply.