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What is Technological Environment of Business?

Technological forces constitute the technological environment. These forces include the expertise, procedures and systems used by enterprises to make profound changes in the transformation process and in goods and services.

“Fuelled by scientific research and industrial breakthrough technological forces define new industries and provide enterprises with tools and opportunities to compete more effectively.”

Factors of Technological Environment of Business

These are the factors of technological environment of business:

1. Better Utilization of Productive Resources
2. Increase in Competition Capacity
3. Risk Efficiency
4. Improvement in Profitability
5. Improvement in Productivity

Better Utilization of Productive Resources

Latest technology encourages better utilization of materials and labor. Scientific and technological skills of labor can be improved with the help of technology. Innovation develops technological bases which in turn create more demand for products in the market. Ultimately entrepreneurial possibilities are increased to meet out growing demand for the product.

Increase in Competition Capacity

Scientific and technological development encourages innovation which ultimately improves product marketability. Cost reduction programmed is also possible with science and technology. Use of outdated technology reduces the market potentiality of the product as well as scope for entrepreneurship.

Risk Efficiency

Technological environment helps in creation of new production techniques. Initially risk is the prime factor of production process but at later stage market absorbs the product risk and stable market is available to the entrepreneurs. Technological development increases the capacity of entrepreneurs to assume more risk in the long run.

Improvement in Profitability

Better technological environment ensures better utilization of resources by controlling the wastage and improving the margins of entrepreneurs. Cost control programmed can be implemented successfully with the help of new technology. Thus, technological environment widens the positive gap between price and cost which ultimately increases the profit base. Side by side, it also improves the profitability of the enterprise.

Improvement in Productivity

Wastage’s of productive resources increase the cost of production. But science and technology help in controlling the waste of resources and ensure their proper utilization. New inventions evident the scope of resource utilization and every resource has its demand in the market.

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