The Impact Of Technology On Entrepreneurship – Technology was coined in 1892 and there have been many people that have been seen as the founders of technology like Thomas Edison, Albert Einstein and many others.
Technology is the reason you came across this article and you are reading it.
It is obvious that technology has a huge impact on our everyday life and operations. It is also glary how it can benefit businesses ranging from small scale businesses to large scale businesses. It has enhanced the way companies conduct their businesses and also improves their efficiency.
The impact of technology on entrepreneurship cannot be overemphasized. It has helped improve the customer relationship of many companies, increasing their sales as they are able to reach out to many customers faster and easily. Many small businesses are now implementing technology into their business so as to have a competitive advantage when compared to other businesses and also to expand their business.
It has also helped many entrepreneurs acquire or learn skills that have guided them to the success of their enterprise. Technology is expensive and many new and young entrepreneurs find it difficult to explore technology to it full extent due to this limiting factor but on the brighter side, technology is useful for every business that wants to thrive as it makes every business activity such as marketing, delivery, advertisement, communication, transportation and many others easier, faster and productive.
In this article, we will be taking time to describe;
- the positive impact of technology on entrepreneurship
- the negative impact of technology on entrepreneurship
We will also look at some questions and answers to the question under the use of technology in business.
THE POSITIVE IMPACT OF TECHNOLOGY ON ENTREPREENURSHIP
Like we said earlier, the importance of technology cannot be overemphasized and this is because technology has helped many businesses excel. Technology has spearheaded many inventions, innovations and legacies and makes live convenient and better.
Many successful entrepreneurs are tech lovers and we most times call them tech entrepreneurs like Steve Jobs (Apple Inc.), Bill Gates (Microsoft), Larry Page and Sergey Bin (Google), Mark Zuckerberg (Facebook) and many more. They applied their ideas using technology.
So whether you are a business entrepreneur, tech entrepreneur or social entrepreneur; technology has proved useful in entrepreneurship.
Let us look at some of the positive impacts below.
- Communication with customers and clients
Technology has really impacted the way we communicate and interact with one another. So it is true to say that technology has enhanced the way and process firms communicate and reach out to their customers. Most firms that have customer service get to relate with their customers personally either by phone calls, websites, social media platforms and other means.
This in a way gets the customers satisfied and boosts the public image of the firm or company. Technology has helped companies communicate directly with their customers to get their complaints about their products and how best to improve the product so as to best suit the needs of the customers.
In this present age, technology has helped many businesses reach out to their target customers and use of the technological tools to offer a better experience to their customers.
Marketing is about directing the flow of goods and services from the producer to the customer in order to satisfy their needs and meet their demands. Technology has made it possible for most businesses to reach out to their target customers through the internet.
These businesses use various tools like virtual reality, artificial intelligence, big data and many others. Most new entrepreneurs use technology to do a market research on their product and the market they want to venture into. The technology of online marketing has helped many entrepreneurs and business owners reach out to new and existing customers.
In the world of the technology and business, many entrepreneurs use data from the market to set out marketing plans to help them find out how best to reach out to their customers.
- Advertisement of product or services
Many advertisements are now done on the internet. With this, you get to reach out to many target customers and it is easier and faster. Advertisement is no longer strenuous with the advent of technology. Many companies create websites and advertise their products or services there.
The modern technology has aided entrepreneurs and business owners to come up with effective and impressive advertisements. The rise of video advertising, video blogging, social media marketing, animations and many more has really improved the efficiency of advertisement and helped businesses reach out to many customers.
The social media platforms also helped companies interact personally with their target customers.
- Widen the customer base
The creation of websites and also social media platforms will definitely help to expand your customer base and reach out to a lot of customers globally. The reason you came across this blog and article is because of technology and many others will also look up this blog.
Technology has made it possible for businesses to run both online and offline marketing and this expands their customer base.
Placing banners, logos, flyers, videos or write-ups about your product or services on the internet gives your business a chance to be seen by a lot of target audience or customers and this will in a way help to gather customers for your product or service.
- Transportation and delivery of goods or services
The movement of goods and services from the producer to the final consumer has been made easy and effective through technology. Technology will help you figure out the best channel of distribution to reach out to your target customers.
Technology has made delivery services of many companies easier, faster and effective. The advent of self-driving cars such as Google car or Telsa would become a safer alternative for drivers as there would be low rate of accidents and wastage.
Technology has also helped in increasing the speed and efficiency of delivery information and services to a large populace.
When we say E-commerce, we are talking about electronic commerce. Taking e-commerce companies like Amazon and Alibaba which are the leading online retail outlets in the world, they create an avenue for customers to purchase goods and services at the comfort of their homes and convenience. This is made possible because of technology.
Technology has made buying and selling easier, faster and convenient. It also gives customers a wider variety of goods to choose from and an opportunity to get value for money spent.
Technology has really promoted e-commerce and this is just the beginning. It has created an avenue for firms to sell their products or services at a low cost.
- Business operations and productivity
Technology has helped many firms in making their business operations faster and easier thereby saving money and time. It has aided manufacturing, processing and also distribution of goods and services. It increases the flexibility of operations and sees that organizations are able to reduce their cost of production, standardize and improve the quality of their product and create value for their target customers.
Most businesses have shifted from labor intensive to capital intensive production system that is use of technology and this has helped increase the productivity of the business. Most times, some businesses train their employees in handling the new technologies so as to improve their efficiency and increase productivity.
The use of computer software and programs allow for accuracy in carrying out business operations unlike the manual methods.
- Securing sensitive information and data
The advent of technology has offered the risk of security threats but the same technology has offered protection against security threats and unauthorized information leak. Technology will help keep your business information private and confidential.
Financial records, business ideas and planning processes are all kept safe and protected by the use of technology. Many computers and digital gadgets have passwords and this help to make sure that business information and records are not stolen by competitors.
The use of CCTV cameras and many other security tools are made possible by the advent of technology.
For a business to grow and thrive, it must engage in research. The ability for a business to use technology to know about the new opportunities and generate new ideas will put that business at an advantage when compared to others.
The internet gives your business the opportunity to conduct a market research at a low cost and easier way and also save you the stress of moving from one place to another. This research helps businesses especially new entrepreneurs to gain a vast knowledge about the market and how to penetrate the market easier and faster.
- Organizing financial records and transactions
Many businesses both large and small are embracing powerful and innovative technologies such as machine learning, robotic process automation, cloud accounting, integrations and many other computer programs to help ensure speed, accuracy, transparency and accountability in keeping financial records.
The technological tools help to create a better understanding about business operations and help to maintain a comprehensive record of daily financial operations and keep business information in a secured internet server.
The electronic banking (E-Banking) has made it possible for business to perform businesses to perform business transactions using mobile gadgets and computers without going to the bank.
NEGATIVE IMPACT OF TECHNOLOGY ON ENTREPRENEURSHIP
As we have talked about the positive impact of technology on entrepreneurship, it will be wise to also let you see the negative impact of technology on entrepreneurship because everything that has an advantage has a disadvantage.
The negative impacts are not to discourage your from exploring the full potential of technology but to let you see how best to use technology to your very own advantage as an entrepreneur and a business owner.
Let us look at the negative side of technology on entrepreneurship.
- Dependence on technology and lack of craftsmanship
The benefits your business gets from technology can be overwhelming that your business tends to depend on it so much. Use of technology is good as it increases productivity and efficiency but any setback by the technology can disrupt business operations.
For instance, a firm that uses a printer to print out receipts for goods purchased by its customers might stop operations when there is a power failure or outage or even a break-down of the machine. There will be a challenge in issuing receipts as it will now be done manually by the cashier and this will certainly slow-down that aspect of business operation. In some cases, the cashier might have become so dependent on the machine that he or she becomes lazy in issuing the receipts manually.
- Retraining workers to fit into the new technology
The advent of new technologies means the old ones are going to be replaced but most times these new technologies come with different features from the previous ones and need a fresh training before it can be handled.
It will involve retraining the workers so that they can fit into the new technology and in some cases, it involves a higher cost of training; time that is supposed to be spent on satisfying customers better would be spent on training workers.
In some cases, the new technology might not benefit the business in a long run.
- Expensive to acquire
Most of these new technologies are expensive to acquire by some businesses especially small businesses; therefore they are at a disadvantage when compared to other larger or medium businesses. Most small businesses do not have sufficient capital to start up and run their businesses and so acquiring technology might be difficult and expensive.
Even the large businesses will have to analyze the cost-benefits of the technology they want to use (machine) before purchasing them due to the cost.
- High cost of maintenance
Many big machines are expensive to buy and also expensive to maintain. The funds that are supposed to be invested into the business to expand it will be used to maintain machines that are not really productive.
Before purchasing any machine or technology, you have to critically analyze the cost and benefit of the machine, look for alternative that you can purchase at a lower cost but efficient and be rational so as not to spend more and gain less.
- Security breach and data loss
When you hear security breach, I know what comes to your mind: hacking. Well you are right. The disadvantage that comes along with technology especially the internet and online space is hacking and data loss. When a company’s security system has been hacked, confidential information and sensitive data will certainly be lost and also competitors can gain access to company’s private information and records.
The use of accounting technologies like cloud accounting and integrations have to be very sensitive so as not to lose financial records and other data.
Also the cost of setting up a strong and reliable security system is very high and trying to fund that can affect the capital that the company is supposed to invest in other profitable business operations.
- Technology is unpredictable
When we say technology is unpredictable, we mean that what can be beneficial to your business today can change another day or become outdated. Some persons will say technology has not favorite. A competitor’s technology can greatly affect your business operation and place you at a disadvantage.
That is why it is advisable to keep up with new trends and updates in technology so as to stay ahead of competitors, learn about new technologies that are beneficial to your business, also learn about that of your competitors so as to continue to survive and remain relevant in the market.
We have discussed the positive and negative impacts of technology on entrepreneurship but the bottom line is that technology can greatly influence your business in a positive way. Many businesses look for emerging technologies and new strategies that will help them reach out to the customers and also give them an edge over competition.
To stay relevant and survive in the market and business as an entrepreneur, you have to embrace and accommodate new technologies. This will help you know how best to reach out to both new and existing customers.
Questions and Answers (Q&A)
What Are The Factors That Affect The Use Of Technology In Business?
There are many factors that affect the use of technology by some businesses; some of them are:
- The nature of the business
The type of business will definitely affect the type of technology the business will adopt and also how the business will use technology.
- The available capital of the firm
Large firms are always at an advantage when it comes to acquiring new technologies than small firms. This is because of the amount of capital they use in running their business. The amount of capital available to a firm will determine the type of technology it will adopt or the production system to adopt (labor intensive or capital intensive).
- The size and scope of the business
If the firm is large or small, it will definitely affect the type of technology the firm will use for its operation. A small firm that requires small operations might not necessarily need huge technology unlike the large firms. The large firms will definitely need some types of technology to enhance its operations.
- Technical know-how and training
The knowledge and understanding the workers have about technology will determine the type of technology a business will adopt and also the training the workers have will determine his or her efficiency in handling the technology.
- Cost of maintenance of the machine
The cost of maintaining machines will determine the type of machine a firm will use to run its operations as most firms try to get a reliable machine at a low cost.
1. The nature of the business
2. The availability capital of the firm
3. The size and scope of the business
4. Technical know-how and training
5. cost of maintenance of the machine