We are living in a time of new structural changes

Economic growth rate has slowed down during the last years, because we have already utilized the benefits from electricity and industrialization, but the opportunities of information and communication technology have not been maximally tapped.

We are living in a time of new structural changes. Information and communication technologies create new products, trades and methods. Electricity has impacted on national economy’s production structural and people life so that we can’t even think about living without it. Information and communication technology impacts the same way. If history will repeat itself, after in one hundred years about 30 percent of our products and services have developed so substantially that we can call our present versions of them as a basic or early version.

There are three ways howany general use of technology raises the production of labour. In the first phase the technology development raises productivity of the new products manufacture. Because of this the level of technology improves. In the second phase the productivity of labour raises, because there is new technology included capital in usage also in the other industries. The third phase, where we actually are just moving at the moment, comes true when companies change their policies for instance moving to the electricity businesses or outsource their know-how work via internet. That way the level of technology will be developed further.

Information and communication technology have changed our life a lot. Did you know that the first connection between two computers took place in the United States 1965? Four years later there were four computers in the same net. In the beginning of 20th century there were 400 000 and today one hundred million computers in that net.

International business has forged a network of global links around the world that binds all countries, institutions and individuals much closer than ever before. These links tie together trade, financial, markets, technology and living standars in an unprecedented way.

Information and communication technology enables worldwide co-operation between and inside companies and simplify daily work with the colleagues around the world. One good example about the worldwide cooperation inside the company is Starbucks. When Mei-Hwa Zhang walks into a Starbucks in Beijing, she has a very similar experience with Mohammad Kumar in Starbucks Kuwait or Franz Mueller in Zurich.

Starbucks stores look very much alike, and the products and services are consistent throughout the world. This is a result of good management, and good management is a result of good information. All Starbucks’ managers have common objectives. They assess how well their unit meets these objectives partly by looking at accounting reports. Accounting provides a common language to help managers around the world communicate financial information. Without this information, managers would find their task much more difficult. The conclusion is again that understanding economy and accounting is very important in the business.

There are some good blogs in the web regarding economy, finance and accounting:

http://www.economist.com/blogs/buttonwood

http://blogs.ft.com/economistsforum/

http://www.economist.com/blogs/economist-explains

http://www.time.com/time/specials/packages/completelist/0,29569,2057116,00.html

http://financial-blogs.com/

Source books for this blog:

Horngren, Charles T & Sundem, Gary L & Burgstahler, David & Schatzberg, Jeff. Introduction to management accounting, 2008. Pearson Education Limited.

Czinkota, Michael & Ronkainen, Ilkka & Moffett, Michael & Marinova, Svetla & Marinov, Marin. International Business – European Edition, 2009. John Wiley & Sons Ltd.

Pohjola, Matti. Taloustieteen oppikirja, 2012. Sanoma Pro Oy, Helsinki.

Shapiro, Alan C. Multinational Financial Management, ninth edition, 2010. John Wiley & Sons Ltd.

McLaney, Eddie. Business Finance – Theory and practice, 8th edition, 2008. Pearson Education Limited.

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One Response to We are living in a time of new structural changes

  1. riittapoysti says:

    You have chosen a good subject for your blog. The article included many good ideas and it shows that you have really thought about these things. Feels like that technology is constantly evolving at an incredible pace forward, and the slowest seem fall behind at the feet. I have often wondered how things have evolved over the decades. The horses have been replaced by cars. We have got airplanes. You can travel fast to anywhere in the world. Electricity, as you mentioned has been revolutionary factor.

    All the time we get new and more efficient equipment. Programs are being developed and you can be instantly connection allmost anywhere in the world. You’re no longer confined a location. Companies required to be more efficiency and the end does not seem to be in visible.

    It will be interesting to see how technology is changing during our lifetime.

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