Technology is one of the factors of production. It decides of how much company can produce with a given amount of capital and labour. It includes everything that affects labour productivity and capital productivity. The technology can also be understood as a combination of knowledge, skills, experience and organizational solutions used in the manufacturing of goods and delivering services to satisfy customers needs.
Elements of technology
- Hardware - the physical equipment necessary to perform the tasks and operations, the machinery, tools, systems, etc.
- Software - knowledge of how to use hardware (programs, databases, projects),
- Brainware - awareness of the technology, the ability and willingness to use it, the competence of employees, the organizational and cultural innovation.
Technology includes the methods and techniques of management, but also the knowledge embodied in specific products (i.e.: material, operating manuals, technical specifications and patents, computer software). It also includes the knowledge and know-how present only in people's minds or contained in organizational procedures.
In comparison with other production factors technology has several special features:
- Knowledge is an elusive category it is a product of the intellect. Usable value of technologies based on the growing knowledge base allows to produce a steady stream of products and services.
- The cumulative nature of knowledge-means that the current level of technology result from scientific and technical progress of past generations, making it difficult to assign them to specific facts or concepts.
- Knowledge is subject to wear, but only in the economic sense. It is impossible to consume knowledge, the technology may be sold and used an infinite number of times without deteriorating. Typical material product deteriorates during use.
- Transnational and global nature of the process of generating technological knowledge makes issues of copyright and patent protection very important.
Technology as a factor in PEST analysis
In the PEST analysis main technological factors are:
- Research and development,
- Information technology and communication systems (IT),
- Production Technologies (numerical control machines, industrial robots, flexible manufacturing systems),
- Product technology (genetic engineering and materials, synthetic fuels, polymer technology, optoelectronics)
- Design technology (CAD / CAM software, artificial intelligence),
- Systems and transport infrastructure,
- Availability and ability to acquire of technology
- Freeman, C. (1989). Technology policy and economic performance (p. 34). Great Britain: Pinter Publishers.002.