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Introduction to Natural and Technological Environment

It is said that at the core of any social system is the natural environment and the availability of technology. Human action in society is greatly influenced by the environmental forces of technology and nature.

In the case of the business environment, we need to study the emerging trends in the natural and technological environment. In today’s business, innovation and Information Technology (IT) plays a great role. In this article, we shall discuss various aspects related to the natural and technological environment.

What is Natural Environment?

The natural environment includes geographical or ecological factors that influence business operations. These factors involve the availability of natural resources, weather and climatic condition, topographical factors, location aspect, etc. Business is greatly influenced by the nature of the natural environment.

And because of the concern for the natural environment, The Delhi Government took a bold initiative to convert all modes of public transport to Compressed Natural Gas (CNG) powered vehicles.

It helped to reduce the pollution levels in the city drastically. Still, Delhi is a highly polluted city. The focus today is on reduced dependence on fossil fuels. We need to increase the usage of alternative fuels.

In India, the citizens and NGOs have been pressing the government and fighting continuously against the following environmental issues:

• indiscriminate mining
  
• Use of harmful pesticides
  
• Deforestation
  
• Introduction of genetically modified foods
  
• Pollution of rivers and underground water

Because of the increasing concerns for the environment, business organizations are required to make investments in pollution control measures.

Emerging Trends in the Natural Environment of Business

The following are the emerging trends in the natural environment that the managers of the business organizations should be aware of:

• Shortage of Raw Material, Especially Water
•  Increased Cost of Energy
• Increased Pollution Levels
• Changing the Role of Governments

Shortage of Raw Material, Especially Water

Take the example of oil, coal, platinum, zinc, silver etc. Mankind has been using these resources for ages. These resources are depleting. We do not have infinite resources. But, we have not been able to make use of tidal waves, solar power etc. These resources are available for use.

When depletion approaches in the case of non-renewable resources, it becomes quite costly to avail those resources. For example, crude oil exploration is very costly. Both onshore and offshore drilling requires substantial cost. use of groundwater levels has become a major concern for the agricultural and industrial sectors as well.

Increased Cost of Energy

Oil is finite nonrenewable energy. uses of this source have been a major concern although the sector has witnessed more supply in the recent past. basically, oil has created serious problems in the world economy. The dependence on oil needs to be reduced.

There should be efforts by the business organizations to harness other alternative sources of energy like solar, nuclear and wind.

Increased Pollution Levels

Pollution has been a global concern. Industrial activities damage the natural environment. The governments have adopted strong measures for pollution control. As a result markets for pollution control equipment and machinery have developed. Markets for scrubbers, recycling centres etc. have expanded.

Because of the potential damage to the natural environment, business organizations have to explore alternative ways to produce and package goods.

Changing the Role of Governments

All the governments in the world are not equally sensitive to the issues of environmental degradation. Developed countries like the USA, Germany, Japan, Singapore etc. are very sensitive to environmental issues. And many poor countries are doing a little about pollution. These countries do not have the funds or the political will.

Technological Environment in Business

Technological environment means the technology development of a country influences strategies of production, newer goods, raw material sources, marker, tools and equipment, services etc. Technological development has revolutionized industrial development.

With the advent of the internet and mobile phones, we can see that the way consumers choose to communicate is changing drastically. When we watch the television, we can find the advertisements for the likes of Flipcharts, Paytm etc. The way the banks are making use of services like ATMs, kiosks, internet banking etc

The entire framework has changed a lot in the last few years. Since the early 1990s, the business environment has changed drastically because of the advancement of new-age technology.

Emerging Trends in Technological Environment of Business

The managers should be aware of the technological changes taking place in the business environment. Some of the emerging trends in the technological environment are shown below:

• Accelerating Pace of Change
• Unlimited Opportunities for Innovation
• Varying Budgets for Research and Development
• Increased Regulation of Technological Change
• Impact on Globalization

Accelerating Pace of Change

More ideas for change and implementation of the same have been an emerging phenomenon. Apple sold 300 million iPods in nine months. People want more and more changes and business organizations comply by offering new products at a fast rate.

Unlimited Opportunities for Innovation

Because of increased expectations of people and customers, business organizations are finding huge opportunities for innovation.

Varying Budgets for Research and Development

Organisations are spending more and more money on research and development. The amount spent by companies on basic and applied research is changing. The effort should not be on copying and making minor improvements to competitors’ products.

Major breakthroughs require major investment. Companies like Tatas and Mahindra and Mahindra have focused on affordable technology with frugal innovations (innovations which reduce complexity and cost).

Increased Regulation of Technological Change

Unsafe products may create health hazards. The governments keep watches on unsafe products and processes. In the Unit on case studies in this paper, you will read that companies are penalized for not making investments inappropriate technology. Safety regulations have increased for food, clothing, automobiles, electrical appliances and construction etc.

Impact on Globalization

Globalization has been greatly influenced by technology. The advent of containerization and global sourcing has facilitated production and transportation in bulk. That helps in saving costs on transportation and improving productivity.

Because of the shrinkage in time and faster or easier modes of transportation and communication, technological revolution, disappearing borders for liberalization and barrier-free trade, the world is evolving into a global village.

What is Innovation?

Innovation can be understood as a “new idea, device, or method”. However, innovation is also viewed as the application of better solutions that meet new requirements, unmet needs, or existing needs. This may be accomplished through

• Introduction of a new product
  
• Use of a new method of production
  
• Opening of a new market
  
• Availing of a new source of raw material supply
  
• Finding substitute products
  
• Reorientation of the industry

All these need to be made available to markets, governments and society.

Types of Innovation

Types of innovations are divided into two broad categories:

• Evolutionary Innovations
• Revolutionary innovations

Evolutionary Innovations

Evolutionary innovations (continuous or dynamic evolutionary innovation) are brought about by many incremental advances in technology and processes. Cars, motorcycles, bicycles etc. are always made new with the addition of new features and applications.

Revolutionary innovations

Revolutionary innovations (also Known as discontinuous innovations) are often disruptive and new. Launching the apps for car rental has changed the entire business of using the services of rented cars.

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