How technology influences production

Updated: Feb 22

Technology can change production methods, improve productivity, quality and efficiency.


  1. Improving efficiency by reducing waste

  2. Increasing production capacity through capital intensive production

  3. Introducing new production methods that improves quality

  4. Enabling labour mobility, reducing dependency on labour for production


Improving efficiency by reducing waste


With the introduction of new recycling technologies, waste from production could be sold or re-used and reprocessed into new products. Computer automation may also ensure machines calculate and measure accurately, optimizing material use, while reducing waste. Accurate amount of material use can be determined, enabling lean production practices such as Just-in-time. This would reduce the cost of production while reducing waste landfill.


Increasing production capacity through capital intensive production


Automation could enable factories to operate 24-hour a day, as machines could function without human supervision. This would increase production and reduce the average cost as idle time reduces. Labour productivity would increase, while reducing dependency on human labour, enabling factor substitution.


Improving quality with new production methods


Technological spillovers could happen when the outcome of research and development result in improved quality of materials used in production and new methods of production. This could increase both quality of product and improve efficiency.


RELATED CONCEPTS

  1. Production methods

  2. Lean production practices

  3. Capital intensive