Over the years I’ve talked about the lifecycle of technology and how it’s inevitable new technology becomes old. Cell phones are the perfect example because they have a finite lifecycle, and when new have high demand. Though not as definite, pretty much all technology has a lifecycle.
There’s another part of the technology lifecycle we often neglect to talk about and that’s the impact it has on cash flow and economy. From the moment a new gizmo is conceived, that little piece of technology impacts our economy. Though it may not be enough to change the global economy, lots of little micro-economies are affected by new technology.
New iPhones are the perfect example. Right now, someone somewhere is coming up with a new iPhone design with features that will revolutionize the industry. Concepts become reality when those ideas are passed along to several teams of engineers and designers. Once the designs are complete the products are put into production at many factories.
Each step of the way requires people who most likely don’t work for free. Each of those people who are relying on the emergence and success of the new iPhone have to eat and clothe their families which means spending money. I’d venture to guess the majority of the cost of a new iPhone goes back into the economy in various forms by employees and contractors of Apple.
Economics, for those who may need a refresher, deals with the financial prosperity of a certain group. In other words, Economics examines how products which are exchanged for money affect us at various levels. Macroeconomics looks at a model on a global level, while Microeconomics examines the economy on a much narrower scale.
In my 600 or so words I have I’m going to dumb my notion down. Basically, new iPhones boost the economy on some level. Jobs are created which create income that eventually leads to people spending money. Globally (again 600 words) speaking, money created by the sale of the new iPhone buys clothes made in China, cars made in Germany and homes made here. Money is put into the local economy through taxes and locally owned businesses.
Because the iPhone is basically a global product, many micro-economies are impacted by the sale of one iPhone. Engineering and management teams based in the US presumably spend their money here. As well, Chinese employees spend their money there. Money is flowing all over the world from the creation of a single piece of technology.
Failures happen in my little Economics model when the product fails or stops being manufactured causing lost jobs and cash flow. Also, if one stop along the way becomes greedy and hoards cash then it stops flowing through at the micro level. Money has to flow for technology to be successful.
One of the major concerns we’re currently seeing with regards to Economics and technology is the stop when technology becomes unusable. Completing the Economics cycle means recycling and putting the end-of-life items back into the mix. Precious metals and other resources used to make technology are seldom repurposed which creates a stopgap in economists’ models.
Over the years I’ve heard a lot of people tell me they’re sick of constantly having to purchase new technology. Take a look at the Dow top 30 list and you’ll be surprised at the number of technology companies listed. Each of those companies is creating technology that impacts our economy. I’m satisfied knowing my company is definitely impacted.
(Jeromy Patriquin is the President of Laptop & Computer Repair, Inc. located at 509 Main St. in Gardner. You can call him at (978) 919-8059 or visit www.LocalComputerWiz.com.)