Technological change: Overview, definition, and example
What is technological change?
Technological change refers to the process by which new technologies are developed, adopted, and implemented, leading to improvements in products, services, or processes. This can include innovations, advancements, or modifications in technology that significantly alter how businesses, industries, or societies function. Technological change can involve the creation of entirely new technologies or improvements to existing ones, and it often leads to increased efficiency, productivity, or new capabilities.
Why is technological change important?
Technological change is important because it drives progress and competitiveness in various industries. As businesses adopt new technologies, they can improve efficiency, reduce costs, enhance the quality of products and services, and open up new market opportunities. It also helps organizations stay competitive in an increasingly technology-driven world. However, technological change can also disrupt industries, forcing businesses to adapt quickly to stay relevant. It plays a key role in shaping the future of industries, economies, and even societies.
Understanding technological change through an example
Imagine a factory that traditionally uses manual processes to assemble products. Over time, the company decides to implement robotic automation technology that increases production speed, reduces errors, and lowers labor costs. This shift from manual labor to automated technology represents a technological change. As a result, the company becomes more efficient, and the workforce needs to adapt by acquiring new skills to work with the robots.
In another example, a software company develops a new cloud-based platform that allows businesses to store and access data remotely, eliminating the need for on-premise servers. This technological change transforms how businesses manage their data, offering greater flexibility and scalability.
An example of a technological change clause
Here’s how a technological change clause might appear in a contract:
“In the event of significant technological change that impacts the delivery or functionality of the services provided under this Agreement, the Parties shall review and discuss potential adjustments to the terms of this Agreement to ensure continued compatibility and efficiency.”
Conclusion
Technological change is a vital force in the modern business landscape, influencing how products and services are delivered, how companies operate, and how industries evolve. By staying informed about technological advancements and adapting to them, businesses can maintain competitiveness, increase efficiency, and meet evolving customer demands.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.