Topic > Technological change: boosting the economy, igniting...

IntroductionIn an attempt to discover why most governments and economists encourage technological changes even if they increase structural unemployment, it is important to first understand the meaning of "change technological" and "structural unemployment". Technological change refers to improvements in processes that make it easier to produce more, efficiently and with reduced inputs. On the other hand, structural unemployment refers to a situation in which the skills needed to produce efficiently cannot be matched with suitable unemployed due to technological change – in other words, it refers to inefficiencies in the labor market. Governments and economists encourage technological change in order to improve efficiently. This change leads to the creation of new products and services, thus creating new avenues of wealth creation in an economy. For example, with the advent of online marketplaces, goods and services from different regions can be easily advertised, paid for, sold and shipped providing different levels of employment and revenue models such as for shipping companies, mobile service providers of money processing, Internet connectivity businesses among other opportunities. This diverse creation of opportunities increases production and stimulates the real GDP of an economy. In this way, the opportunity cost of the previous example is an increase in the cost of training workers for the new skills required to perform the above tasks. That said, the benefits of technological change outweigh the associated training costs. As a result, governments and economists support technological change despite structural risks. That said, there are dangers of structural unemployment that are a byproduct of technological change and that must be addressed. However, the benefits of technological change, such as efficiency in production with reduced inputs, outweigh the problems of structural unemployment and this is why governments and economists continue to support technological change despite structural unemployment. References Rittenberg, L., & Tregarthen, T. (2012). Principles of Macroeconomics V. 2.0. Licensed under Creative Commons by-nc-sa 3.0 (https://creativecommons.org/licenses/by-nc-sa/3.0/)Training. United States Department of Labor. Retrieved May 24, 2017, from