The Economy

Home Up Economy Answers

Let 's start try looking slightly below the surface to see how technology impacts our "standard of living". Remember this is supposed to be one of the reasons technology exists.

First of all, in order for technology to blossom it requires 7 major ingredients/ resources. 

The 7 resources common to all technologies:


Naturally when technology is at work, all of these elements are needed.

If an area or a country is lacking any combination of the above mentioned tech resources, technology is crippled. All of the 7 resources must be available and manageable. Most often, access to capital and information are what struggling countries lack. 

It was the material resources (from her colonies, along with her own coal and iron ore) and especially information (designs of their machines and new techniques that the English kept hidden from the rest of the world) that gave England the jump on the Industrial Revolution. First water was the source of energy, then coal provided the necessary energy to produce steam. England had already established plenty of capital, which didn't hurt. She mobilized her workforce from the country side, and skyward went the economy.

 Today, if one were to compare the "G-8" countries of the world, the wealthy and powerful countries such as Canada and Great Britain, to the under developed countries of the world such as Ethiopia and Rwanda; it would not be a coincidence that we would see that what "the have" and "have not countries" have or have not firstly; is technology, or at least enough of the pieces of the technology puzzle. 

  Technology plays a heavy role in a country's economy. Industrialized counties have the means to have high output productivity, to mass produce. There is a saying: "Mass consumption leads to mass production." This statement some what relates to how the effect of supply and demand  contributes to the health of an economy. When a country or area has the technological support to fulfill it's needs and wants, instead of having to import everything, then the money/profits are kept in that country. In doing so, people are employed, the more people employed, The more they have to spend, the bigger the demand for more products........ the stronger the economy. Technological based employment usually requires a higher educated  work force, usually, in countries like ours, that translates into higher paying jobs. So the 1st positive result to technological intervention is economic growth. 

Economic growth = more employment, more investor commitment, more community support and spin offs, more taxes for government to spend constructively, while less burdening other government social programs, and so on. 

Within this global community, we all have to work together. Underdeveloped countries may prove as competitors as far as labor costs and so on, but they are also important providers of natural resources such as oar deposits that fuel our Country's industries. Countries such as Cuba can be cut from the tech loop through legislated embargos which restrict trade by governments, prohibiting sales to such countries. This greatly impedes on these penalized country's economic growth by crippling their ability to develop technological infrastructure.

Countries that have to rely on individual or cottage industry production, where products are produced one at a time, often have a lower standard of living compared to that of industrial nations. There are exceptions; when a cottage industry requires highly skilled people that produce custom made, valuable products such as hand carved crystal or specialized medical equipment. In this case, the return can insure a high standard of living.

To put into perspective this statement: mass consumption leads to mass production and what that means for our economy, consider if there were sufficient supply and demand to warrant the fish plant in Cheticamp N.S. to expand to a full time, year round  operation. The operators would need to hirer more people. The raise in employed workers in Cheticamp would result in more people having more money to spend in the community. The more people spending more money increases the demand for more and better products and services. There would also be more people paying taxes instead of being a burden on the government through employment or welfare costs. The fish plant operators and shareholders would also be required and encouraged to invest more into the plant and perhaps the community. The company would also be paying more taxes along with the workers. The government, as a result of all of the above, would be able to direct and even redirect more funding towards such things as education, health care and  infrastructure that could attract even more business. In a perfect world, the snowballing effect would result in a continual rise in the quality of life and standard of living in an ever increasing area around Cheticamp.

 A real example of this scenario could be the call center newly erected in Port Hawkesbury N.S. following the completion of the $750 million P.M.2 plant (paper making machine) also in Port Hawkesbury N.S.. The economic boost for Port Hawkesbury was and is actually felt by the whole of Cape Breton Island. The construction phase supported not only the industrial trade and construction segments, but retail segment of society, as well as the people who housed, transported and entertained the large influx of temporary residences. Once running, these places secured employment for hundreds of direct employees and thousands of incomes indirectly associated with these projects. 


  This ***economic growth is obviously a benefit of technology.***The jobs created as a result***, are also an obvious benefit of technology. However, history tells a story about large numbers of farmhands who were replaced by mechanized farm equipment produced around the time of the Industrial Revolution that were quicker and more efficient, as well as hundreds of thousands of cottage industry weavers who were replaced 2 - 3 thousand weavers per weaving machine. 

Below is an example of how many wood cutters (in our area and in more recent times) are being replaced by automated machinery. This harvester (modified excavator equipped with wood cutting head) is operated by one person who can produce 50 cords of wood a day. If they do shifts, as this machine can be equipped lights to work 24 hours a day, it can produce in excess of 100 cords in good wood.
harv1.jpg (293435 bytes)
- It cuts the tree off.
harv4.jpg (336514 bytes)
- de-limbs it.
harv3.jpg (321937 bytes)
- Measures and cuts to length
harv6.jpg (333368 bytes)
- piles the wood
harv2.jpg (346468 bytes)
- all in seconds, by one person

 Again, (today) in this, the information era, factory workers are replaced by automated equipment such as CNC (computer numerical controlled) machines, inspection lasers, and robot welding machines. 

Robots are mechanical devices controlled by computers. Real robots today are not what we see in space movies. They often resemble body parts and are programmed to perform human like activities. 

A robotic arm may have 10 joints instead of three, and rotate 360 degrees. Besides being more flexible , robots can perform in conditions that humans cannot, for example: Exploration of the Titanic on the bottom of the ocean ,or that of Mars with the space probe "Spirit". They are also used to dismantle bombs or to fight fires. Scientific studies and human lives are enhanced as a result of these machines. 

In class assignment: As an intro to the next session, click on . If this link does not work, copy this link to your browser: , click on "technology", then "robots". Wait for the video to load, watch the video, and then answer the quiz. Note: Some of these questions are likely to show up on the test.

On the down side, robots like the one to the left, and CNC machines, like the one below, are replacing human workers. These machines can accurately, consistently and efficiently perform specific tasks, never getting bored or distracted. These automated machines quickly pay for themselves by their ability to work virtually 24 hrs a day, 7 days a week with out skipping off; with out a salary, benefit costs, no sick days or vacation etc. These are some reasons why so many jobs are lost to automation. So, ***technology does produce employment, but it also (machines) reduces employment.***
robotarm2.jpg (267105 bytes)  This is a CNC lathe machining (cutting out) a geometrical shaped piece from a blank (piece of material). Note the robotic arm loading & unloading the stock. It is highly likely that the job could be done on a manual machine, but because of the rigidity of the CNC machine and it's ability to machine at a constant surface ft/min, it can operate much faster. Even more efficient is it's ability to accurately repeat it's path indefinitely without any downtime due to interruptions and second guessing itself. The same can be said of harvesters and new bailing equipment. A farmer can nearly collect his crop single handedly these days.
One device of today's modern age, is the laser. It has many purposes besides being a pretty light; they are used as security devices, as very accurate measuring devices and even cutting devices.   

Jobs can disappear in other ways as a result of technology. Some times economies strive at the expense of others. If products can be made cheaper somewhere else, most likely they will end up being made somewhere else. As a result, the jobs go too. The product may be made cheaper in other parts of the world for numerous reasons. Perhaps, they have more efficient technologies, cheaper labor costs or less demanding tax regulations or pollution guidlines. What ever the reason, the ***downside of some technology systems, is that Canadian jobs can be lost to other countries abroad who can provide goods or services at less cost.*** When this happens, our GNP (gross national product, which is our country's total income) could drop.

 To help compensate our government can legislate tariffs (import taxes on goods coming into Canada) to help protect Canadian jobs. The government can also issue subsidies in the form of tax breaks, grants and so on to Canadian companies.

In order to sell, all companies have to be competitive and innovative in a world market. Some areas of the world become specialists in certain areas of technology, other countries can fall back on their abundance of natural resources. We have entered a global economy, where the exchange of raw materials and finished products and services has developed into an interdependence between countries such that transactions in one country affect other countries. The boarders of our countries are much less absolute than they use to be because so many decisions made by one country is bound to affect other countries. 


1.) What kinds of machines are taking people's jobs today?

2.) a.) How might the technology from one culture differ from that in another?
    b.)  What are two good reasons why they might differ? 

3.)  Does individual or cottage industry outputs (production) necessarily mean that the producer will have poor standard of living, or low return of investments? Explain.  

4.) In some societies, modern technology is not always the answer. Why?