ECONOMIC IMPACTS

THE PAST• Until the early 1990s computers were rarely seen within homes.

The were generally very expensive and slow. • By the late 1990s dial up internet was available in most houses

and by 2004 broadband and fibre internet was freely available.• By 2014 Smartphones and tablets became popular and 4g internet

for portable devices became more accessible, meaning faster speeds when moving around.

• This means a lot more people are now connected to the internet meaning businesses have access to a much wider market.

ECONOMIC IMPACT• The Economy is looking at both the supply of money and the

production and consumption of goods and services within society.

• The use of Computers can have a negative and positive effect on the Economy.

E-COMMERCE• E-Commerce is the buying and selling of goods on the

internet. • The internet has changed the way we buy and sell goods. As

well as this a consumer can compare prices on the internet to ensure they are given the best deal.

• It is estimated that 40% of shops will close in the next five years and more people and buying their projects online.

E-COMMERCEThe advantages of using E-Commerce websites over traditional shops are:

1. No rental or buying costs of high street shops and no costs for furniture and staff.

2. Cost of goods can be reduced, since there is no overheads. Therefore prices can be competitive.

3. EFT (Electronic Funds Transfer) reduces the security problems in handling cash.

4. Can be accessed from anywhere and can target a larger market including overseas.

MAINTAINABILITY• Maintainability is recognising the need for maintenance on an

Information System. This can include upgrades of the system in order to meet the needs of the consumer.

• Companies often need to bring their sites offline in order to perform these changes. This can have an impact on sales or gaining new customers while it is down.

• Business will try and minimise this impact by bringing sites offline when site activity is low. They will make sure that their downtime is limited to 1-2 hours, often giving advanced warnings.

SCALABILITY• Scalability is a measure of how well an information system can cope

with increasing demand as the business grows as well as finding out if there is potential for economic growth.

• An example could be if an online store suddenly receives a very big order to manufacture. The company will need to decide whether to meet the order demand by taking on more staff and resources or even rent larger premises.

• However, if the company sells software for example that will require the user to download their project then there is very little extra cost for the increase of demand.

OTHER ECONOMIC IMPACTS

• Due to the increase in the use of computers there has been job losses where the use of human employees are no longer needed.

• There has been an increase in the creation of jobs as well due to the need for technical maintenance and software engineers.

• Computers to perform tasks better, faster and cheaper which saves and makes money for the business.

• More use of online services would create a "competitive advantage“ for the business. For example Amazon has increased in a variety of services and often companies that have no bought into online services are left behind.

• Demand for the computer technology has created a problem in developing countries. Recycling computer parts and manufacturing are often given to workers who are often very under paid, lack acceptable health and safety regulations and in some cases child labour.

OTHER ECONOMIC IMPACTS

• The freedoms granted by technology are leading to increased insecurity in the workplace. Some workers are under threat as companies shift their production lines or call centres overseas to low-wage economies.

• High paid jobs have been created and entire economies have began changing for the better due to the need for highly educated and skilled employees. Due to internet, employees could be located anywhere in the world. Decreasing the need for an office.

OTHER ECONOMIC IMPACTS

BUSINESS COSTSAdvantages of online information systems:

• E-Commerce is relatively cheaper way of introducing your business to the global market.

• No need to rent/buy high street shops which also need to be furnished, lit, and heated.

• Delivery no longer needs to go via the retailer.

• Customers can shop / use services 24/7 increasing profit.

• Social media, 'viral' marketing and web advertising can make it cheap to promote and maintain your brand identity and relationship with customers.

BUSINESS COSTSDisadvantages of online information systems:

• Initial set-up costs can be high when purchasing equipment, training staff and employing experts to install like for example programmers, technicians and media specialists.

• There are running costs to be met: electricity for the hardware, communications bills for internet connections and web hosting, ongoing maintenance, hardware and software updates.