Relationship Between Technological Developments and the Business Environment

Critically evaluate
the relationship between a specific technological
development and the business environment. 
The
advancements in technology has certainly aided international business. Unlike
the industrial revolution which took around 100 years to trigger a massive
effect on the society, the internet revolution has occurred more
instantaneously. Technology has certainly played a very decisive role in
boosting the economy through e-commerce. The term e-commerce as such was first
used in 1994. Since then, we have seen an exponential increase in the growth of
e-commerce. Recent advances in three technological
areas namely computer technology, telecommunications technology and software
and information technology are changing lives in ways we could not even imagine
two decades ago. There were only some 4.5 million internet users in 1991, and
estimates suggest that there will be as many as 300 million or more by the turn
of the century (Bacchetta, 1998). Multinational
companies like Amazon and eBay are leading the market, surpassing other
competitors in their own field and also the physical retailers. This article
aims at critically analysing the relationship between e-commerce and the
business environment and vice-versa. The following paragraphs will portray a
brief idea on what e-commerce is, its role in the modern electronic world and
later on explain the different issues revolving around it.

Get Help With Your Essay
If you need assistance with writing your essay, our professional essay writing service is here to help!
Essay Writing Service

 E-commerce can be
defined as “technology mediated exchange between parties (individuals or
organizations) as well as the electronically based intra- or
interorganizational activities that facilitate such exchanges” (Rayport &
Jaworski, 2001).
Some of the businesses in which e-commerce plays an important role are online
retail, online banking, stock exchange firms etc. This particular technological
development has brought the world closer, thanks to the super innovation of
internet. It has become a one stop market where the consumers can find anything
that they wish for, without the need to be physically present there. The
article will do a PESTLE analysis on e-commerce.
Political
For any economy to flourish, there should be
liberal and relaxed policies that are accepted by the government of the
respective nations. The policies adopted by these bodies determine how well
their trade and economy would be. “To promote an effective international
economic system, we should also strive for creativity in governance. In the
modern, wired world, government will become increasingly ineffective if it
fails to keep up. This logic of governance should extend to the rules of our
trading system. To enable businesses, economies, and societies to change to
meet the challenges of new circumstances, our trading rules should be flexible
enough to respect different national approaches while consistently challenging
actions that discriminate against others and thwart openness with protectionist
barriers.” (Speech, The United States, Europe, and the World Trading System,
April 15, 2001). These policies may vary for different locations taking
into account various factors like currency, political views and demographics.
The US
government has played a very important role in stabilising the e-commerce
industry. A report regarding the internet trade was released by the Clinton
administration in July 1997. It was entitled “A Framework for Global Electronic
Commerce “. The report suggested that the internet trade should be free of
unnecessary government regulations and that its governance should be dealt with
a global point of view. It also focused on some major issues like customs and
taxation, e-payment systems, privacy, security, telecommunication
infrastructure, content and technical standards. The report also emphasised on
the private sector by recognizing the need for the structuring of a legal
environment to ensure its participation. (Malawer, 2001)  
Not
only the US, but the EU has also been an active player in considering
e-commerce. The European Union
also released a report on the internet trade in 1998. It was entitled “The Need
for Strengthened International Coordination” which states that “Ill adapted or
fragmented regulations, however, will hinder the development of the online
economy” (Malawer, 2001). This report,
similar to that released by the US, also asserts the need for an international
regulatory framework. The report also points out that issues concerning the internet
have grown from the technical to commercial as well as to legal issues like
taxation, copyright, authentication, encryption, data protection and consumer
protection. (Malawer, 2001)
Economical
The
trade of products through e-commerce have helped reduce the cost of transaction
charges that are present in the supply chain, starting from production of goods
or services to its delivery to customers. Its evidence is given in the “Economic
and Social Impact of E-commerce: Preliminary Findings and Research Agenda” OECD
(1999) which
states that “Rapid technological progress in information and communication
technologies (ICTs) along with their widespread diffusion have led to
speculation about “frictionless” economies in which transaction costs are
nearly zero” (OECD, 1999). Consumers can now
avoid the physical strain to go from shop to shop looking for their desired
products, which in turn saves a lot of money. Online retailers are now shipping
their products for free. This improves the e-market business as more and more
people will be tempted to do online purchases since it gives the customers a
great relief in monetary terms. The retailers are also benefited by the
innovation of electronic commerce. It has helped many small-scale businesses to
sprout and make them self-established in the market.
Social
Societal
factors have a major share in the electronic world and will continue to reflect
its profound influence in the foreseen future too. In this age of rapid
advancements in technology, it is therefore important to note the various
social processes that will have an influence on how the e-commerce grows and
how it will affect the society as a whole. Two of such social factors are –
firstly, access and its determinants and constraints and, secondly, confidence
and trust. (OECD, 1999)
The
impact of any idea on a society depends to a large extent on the demographics
of the society. New and advanced technologies are more accepted by the youth
rather than senior citizens. It is therefore very important to identify the
people to which the ideas are introduced. People born between 1950s and 1980s
are more accustomed to the traditional way of purchasing items from shops,
especially in India. Not only do they shop but even bank transactions are done
personally. The reasons for this primarily being, they are used to old ways and
secondly, they see it as a chance to engage in a more active social life.
Therefore, it is better to go with fresh and innovative ideas which would suck
in maximum number of youths.
Technological
The
rise of advanced technology has aided the growth of commerce, both physical and
online. In case of retail shops, the implementation of new equipments like bar
code scanner and self-payment systems have increased the easiness of shopping.
In the online market, the growth of new technologies from the start of
e-commerce have enabled the establishment of various businesses. Today starting
a new business is as easy as breathing the click of a button is all we have
to do. These technological advancements have been of great help to both the B2B
(Business to Business) as well as B2C (Business to Consumer) classifications of
e-commerce. The growth of e-commerce has forced technological advancements to
further increase their capability. The better the technology used, the better
the business will be. So, software developers are also in constant competition
in bringing up the most modern technology.
Legal
To exploit the maximum of this electronic
business world there should be some regulations that must be followed. But
there are many regulatory issues that deter the success of these businesses.
For example, there is no common law regarding international e-commerce for all
the nations. This is asserted in the “E-commerce Legal Guide”.  It states that “The legal and regulatory
framework for global e-commerce is quickly being outpaced by market innovation,
and many countries do not yet have a legal system for e-commerce in place. Further, while legal and regulatory
frameworks for e-commerce are evolving at the national – and sometimes
sub-national – levels, there is not a set of harmonized international rules,
giving rise to questions around cross-border e-commerce” (New Markets
Lab, 2018).
This legal guide takes stock of global trends in e-commerce regulation and the
existing legal practices in different parts of the world. Although there are
many issues affecting e-commerce, there are particularly four regulatory issues
that need to be focused on – electronic or online transactions, commonly known
as e-payment and e-signature, data protection, cyber security and consumer
protection. These factors affect every link of the e-commerce supply chain,
from the organizational structure of a company pre-transaction like appointment
a data protection officer to the completion of transaction to issues
post-transaction like consumers’ right to withdraw from a transaction.
One of
the major regulatory issue mentioned earlier was
e-payments. The service providers want guarantee that they will receive
their payments on time. Since this is not a physical trade and the business
happens across globally, both the consumer and the business should have a
mutual trust. The issues concerning both the public and private sectors are
prevention of fraud, an agreement with the banking requirements and a secure
transaction of payment. Similar are the concerns with e-signature, its
authenticity and the secure way to implement the contract between parties. E-commerce
has led to the creation of an unprecedented amount of data. Data protection has
always been one of the top priorities of any government owing to the concern
about the national security and the consumers’ concern on their data
protection. Cybersecurity, like data protection is also a major concern in the
modern tech world. Cyber-attacks on computer networks are a threat both to the private
and public sectors. Consumers may be troubled by the thought of securing their
data, since consumer protection is very vital to the existence of any internet
related business or transactions. (New Markets Lab, 2018)
Environmental
The
world is so concerned with other issues related to internet commerce that its
environmental impact is the least of all issues talked about. There are a
number of ways in which the businesses today are adapting to a greener side.
Unlike old days where there would be a pile of files in the offices, the
business nowadays is entirely paperless. It greatly reduces the need to cut
down millions of trees, ultimately making the earth greener. E-signature is a
great example on how the need for the official authentication on a piece of
paper has been greatly reduced by the advancements in e-commerce. While we
discuss the merits of this high tech, we must also shed a light on mere harm
effects of e-commerce. The total electricity consumption for internet use in Germany is
estimated to be about 1%. In the USA, a total of 3% of the overall energy
consumed come from the usage of office equipments and internet infrastructure, as
of 2001 (Fichter, 2001). Seventeen years
from then on will definitely give us a higher percentage in the overall energy
taken up internet. The rise of latest technology and the amount of time people
spend on the internet today can be taken as the input for this high number.
In summary,
the recent developments in the technological arena has taken us to a new era of
fast-growing life. These advancements have paved the way for the development of
many nations. The adaptation of modern technologies has led to the huge success
of many business firms. Amazon, Alibaba, Netflix etc are a few examples of
them. The introduction of internet is one of the greatest innovations of all
time. The access to unlimited amount of information, the ability to do
international trade from a small part of the globe is one of the few gifts that
have been showered upon us by the internet. Of all, the rise of e-commerce has
enabled the growth of private as well as public sectors in all nations. It has
led to a great deal of satisfaction among both the business as well as the
consumers. The various factors mentioned above like political, economic,
social, technological, legal and environmental have serious effects on
determining the growth or decline of a certain business. These factors must be
dealt with at most care in-order to maintain the existing peaceful business and
economy.
References
Anon., n.d. [Online].Bacchetta, M., 1998. Electronic commerce and the role of the WTO, Geneva: Econstor.Fichter, D. K., 2001. Environmental Effects of E-Business and Internet Economy. [Online] Available at: https://www.borderstep.de/wp-content/uploads/2014/09/P-Fichter-Environmental_effects_of_e-business_and_Internet_economy-2001.pdf[Accessed 03 12 2018].Malawer, S. S., 2001. International Law Section. [Online] Available at: http://www.worldtradelaw.net/articles/malawerecommerce.pdf.download[Accessed 01 12 2018].New Markets Lab, 2018. intgovforum.org. [Online] Available at: http://www.intgovforum.org/multilingual/sites/default/files/webform/e-commerce_legal_guide_draft_24_may_2018_nml.pdf[Accessed 02 12 2018].OECD, 1999. Economic and Social Impact of E-commerce. [Online] Available at: https://www.oecd-ilibrary.org/docserver/236588526334.pdf?expires=1544037485&id=id&accname=guest&checksum=A49E7EA4D96759BD15E3F4673D4E28BB[Accessed 03 12 2018].Rayport, J. F. & Jaworski, B. R., 2001. Introduction to e-commerce. Second ed. s.l.:s.n.