There is no question that technology has greatly impacted the economy today, from international trade to manufacturing to agriculture to corporate business. Both the positive and negative effects of technology are felt everywhere in the new economy. The advancements in technology have not only affected the economy on a large scale, but they also affect small businesses and entrepreneurs. It’s important to understand the full impact of technology on business and see how it can help or hinder your company.

Contributing to GDP Growth

The advancements in technology contribute to the gross domestic product growth of many countries. According to CIO, countries worldwide spend close to $6 trillion a year in corporate spending on hardware, software, data centers and more. That expenditure is bigger than the entire GDP of countries like Japan and Germany. Technology is a part of every single industry, and as such, businesses need to invest in technology advancements in order to improve their products and services, gain market share and keep up with their competition.

Increasing Efficiency and Mobility

One of the major benefits of technology in the economy is how it has helped to increase efficiency and productivity across industries. Manufacturing organizations are able to increase their output with technology advancements, which has resulted in more competitive pricing for end customers.

Mobility has also been significantly impacted by technology. Shipments from the other side of the country or from a different country arrive at your doorstep within days. The internet has also given employees the freedom to work from remote locations. Many companies have completely virtual offices thanks to advancements in telecommuting software.

Improving Communication and Collaboration

One of the advantages of technology in international trade and other areas of the economy is the ease of communication and collaboration across geographical distances and time zones. Corporations with offices in different countries can seamlessly meet with their colleagues and customers over video-conferencing software. Cell phone service in developing countries has changed the way people communicate in remote areas.

Adding to Cyber Crime and Security Concerns

A limitation of the new economy that’s centered around technology is that an organization’s data may not be as secure online as it is on paper. Modern technology opens up a business to online security threats including viruses and other software and hardware concerns. According to a McAfee-sponsored study, organizations worldwide lose up to $400 billion as a result of hacking, credit card fraud and intellectual property theft.

Dependence as a Downside of Technology

While technology has certainly increased productivity in many industries, it can also bring it crashing to a halt. If the machinery, software or hardware malfunctions or needs to be repaired, the efficiency goes down considerably since organizations are fully dependent on technology for day-to-day business operations.

As a result of this dependence, many workers are losing skills they may have needed a few years ago to do their jobs. For example, something as simple as talking on the phone is no longer common in many workplaces, as most people prefer to email or instant message instead. When the technology goes down, not all tasks can be done manually due to lack of skills or lack of resources.

Moving Faster Than Regulations Can Catch Up

When technology is changing month to month, it’s difficult for regulations and laws to keep up with the advancements. As a result, when issues arise due to technological reasons, there may not be guidelines on how to proceed from a legal or regulatory standpoint.

For example, there is the question of whether the government has the right to intercept and listen in on a cell phone conversation or whether that encroaches on a person’s civil liberties. Because technology is advancing the way people communicate, work and do business faster than the rule of law, it can lead to questions around privacy, security and individual rights.