Question

Technological innovation is an extended concept of innovation. Technological Innovation, however focuses on the technological aspects of a product or service rather than covering the entire organisation business model. There are both advantages and disadvantages of technological innovation. Briefly present these advantages and disadvantages.

Answer 1

Advantages

Growing Your Markets

One of the main benefits of technology is its ability to help even smaller businesses compete on a global stage. Innovations such as the internet, for example, allow a sole proprietor to offer her products or services to prospects around the world through the use of a website.

Reducing Your Costs

Innovation can also help business owners keep costs to a minimum. With the use of automation, a small manufacturer can reduce his dependence on human beings to perform some of the necessary production processes. As a result, the business can reduce employee expenses such as salary, benefits and turnover.

Getting Timely Information

A key benefit of automated accounting is the wealth of timely information that’s available to the business owner. Using data processed and extracted from your daily transactions, computer software can let you quickly measure the effectiveness of an ad campaign, check if your taxes are current, and know if you’re low on critical stock items

Disadvantages

Lowered Worker Morale

While innovative technology may reduce the dependence on a workforce, the flip side is that employees might lose jobs in the process. In the case of a small business owner, this may mean she needs to make a difficult choice between increasing profits or letting go of long-time employees. Even if the implementation does not result in job loss, some employees may have difficulty adapting to the change.

Set-up Costs

While new technology can result in savings in the long run, you might see a significant upfront expense. A small business owner may not have the resources to purchase a state-of-the art computer system or new machinery, or may need to borrow money to do so.

Early Adopter Blues

In many instances, new technology brings new headaches: software bugs, compatibility issues, and a lack of familiarity by the vendor’s support staff. Because of reliability concerns, you find yourself in the situation where your business needs to run on your older technology while the new version is being sorted out.