Impact of Innovation on Economic Perfomance on Micro and Macro Level Essay

Impact of Innovation on Economic Perfomance on Micro and Macro Level - Essay Example This essay is one of the best examples of comprehensive theoretic analysis of the mechanism of the impact of technology changes on the competitiveness of a company or an entire economy of a country. The tighter and more competitive business environment is driving firms to innovate in order to maintain their existence as a market player. However, as more firms innovate, the struggle to maintain their share in the market in turn gets other firms to innovate, capturing everybody to be part of a complex economic cycle. A source of new technology is the society’s search for increased economic efficiency and a sincere desire to reduce the cost that it has to pay for the availability of goods. Whether the purpose of the technology is to improve its effective use of available natural resources or to increase or alter the supply of available resources, it has impacted what people buy (hence created new demand types), what they choose to do with their time (leading to new market for leisure events), what jobs are lost due to changes in the overall economic mix, and possibly the price of other goods that compete with the products, that were produced using new technology. Research, entrepreneurship, new start-ups, consolidation of businesses, interaction with other companies and financial markets create an environment that is conclusive to innovations. Novel trends in innovative activities are impacted by new technologies, modifications in the existing knowledge base, as well as changes in consumer needs.