GIT: Living in the IT Era

LECTURE 01
IT Trends
Introduction
The rise of information and communication technologies (ICT) – that is, computers,
software, telecommunications and the internet – and the large impact that these new
technologies are having on the way that society functions, have prompted many to claim
that we have entered a new era
Industrial Revolutions
A period of development in the latter half of the 18th century, where there is change from
one economy to another
Involved technological, socioeconomic, and cultural aspects
Occurs when technological change fundamentally transforms the way in which a society
carries out the production and distribution of goods
Changes (innovations, inventions, product innovations, process innovations)
Industrial Revolutions
INVENTIONS INNOVATIONS

Discovery of new products and processes Commercialization and improvement of the

◦ Machines existing products.
◦ Telephone ◦ Assembly Lines
◦ Automobiles ◦ CD’s
◦ Television ◦ Flat Screen TV’s
◦ Computers ◦ Smartphones
Industrial Revolutions
Products / Services
Transportation
Production System
Communication
First Industrial Revolution - 1765
Started in England during the late 18th century. Concentrated in Britain
Initially 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 - print
Second Industrial Revolution - 1870
Products / Services – electricity, chemicals, petroleum, steel
Transportation – automobiles, aircrafts
Production System – machine-aided equipment
Communication – telephone, telegraph

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

Chemical industry
Third Industrial Revolution - 1969
Started with the development of transistors.
Rise of electronics and digital technology.

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

Transportation
Production System - Automation
Communication
IT and PRODUCTIVITY
General Purpose Technology
It is a technology of sufficiently wide application to be used in various parts of the
economy and whose impact is pervasive.
Main Characteristics of a GPT
It must have a wide scope for improvement and elaboration
It must be applicable across a broad range of uses
It must have a potential use in a wide variety of products and processes
It must have strong complementarities with existing or potential new technologies.

Lipsey et al., 1998

 Productivity
The quality of producing something
Measure of the efficiency of a person, machine, factory, system, etc., in
converting inputs into useful outputs
Productivity: It is an indication of the efficiency of production or distribution.
Gross Domestic Product (GDP) - Total monetary or market value of all the
finished goods and services produced within a country's borders in a specific
time period.
Productivity
Labor productivity can be measured as output produced per hour of labor.

Labor productivity / Workforce productivity

◦ Total Output / Total Input
◦ $80,000 worth of goods ; 1,500 hours ; 30 employees
Example Computation for
Productivity
If a group of workers produces 10,000 units of output in one year, and 12,000 units the
next year. Calculate the percentage increase in productivity.
Calculate the percentage increase in productivity if the output expands from 12,000 in
year 2 to 15,000 in year 3.
The Effect of Technology on
Productivity
Example: Consider an automobile factory that is able to produce 10 cars per day using
100 hours of labor. If a new invention permits same workers to produce 20 cars in the
same amount of time, then their productivity has been doubled
Division of Labor and Productivity
The division of labor refers to the degree to which the various tasks involved in the
production of a good or service are divided among different workers.
Division of Labor and Productivity
Productivity increases when the division of labor increases. Increases in productivity can
be transmitted throughout the economy for several reasons:
◦ Productivity – Income
◦ Productivity – Cost of Production

Reference: Information Technology: A New Era. The Open University. 2016.