Introduction

Technology and Innovation has impacted the imperative traditional notions including policy, governance, administration, and enforcement mechanisms. The recent global development lucidly delineates that empowering tech-growth in economies has resulted in momentous and multi-dimensional impacts. The traditional state of affairs embodied a limited inclusion of innovative tools and instruments, but now we see the entire spectrum of global nation states having technology as an integral part of their domestic structures. Moreover, technology led innovation followed a traditional economic trajectory as well that is based on the basic fundamental principle of ‘Demand & Supply’. The demand for impactful innovations remained on the surging trend, being generated from the most pivotal institution that we popularly call the ‘Society’. With a rising demand for innovative technologies, the market forces of ‘Price’ and ‘Quantity’ led the suppliers to overhaul the supply chains and produce demand-led imperative technologies. Now when we are undertaking a retrospective analysis, we see the altering paradigm that has placed technology and innovation at the very center, a position traditionally enjoyed by ‘economy’ for centuries. 

This article aims to analyze the growth in technology in the traditional economies and the transformation underway as a result of building nexus with other imperative subjects of global concerns. 

Economy and Technology - Analyzing the Nexus

While taking the analysis further, the high build-up of technology within the economies of the world has not been less than a marvel. The National Economy has been viewed with a precise and narrow lens of ‘primary, secondary and tertiary’ sectors and public policy debates have been centered on trade in goods for a very long time. With the technology entering markets, the concept of ‘Trade in Services’ developed and has become a capital capturing part of every national economy. Furthermore, the parameters that lead to the development of technology and innovation (Market Equilibrium) still remain relevant, although the economic principles seem to be highly overwhelmed with the impact that technology has crafted. It is important to note that some of the gigantic tech structures across the world are economically stronger than many sovereign nation states. 

Likewise, numerous economists have been predicting this monumental and progressive impact of technology on the economy of states. The famous ‘Solow-Swan Model’ popularly known as the exogenous long-run growth model predicted economic growth through technological advancement caused by increase in factor productivity. Similarly, the ‘Romer Model’ famously termed as the endogenous growth model linked growth in innovation and technology with the economic growth, and further stressed on the pivotal role of entrepreneurs in an economy. The ‘Cobb-Douglas Model’ that extended the research work of ‘Philip Wicksteed’ delineates the production function of an economy depending on labor and capital input. This model incorporated the impact of technology in the early 1900s by adding ‘total factor productivity’ as an important variable that is an elasticity measure calculating the impact of technology. 

Furthermore, the 20th century economic thoughts have been more tech-centered. The renowned economist Joseph Schumpeter in his theory of ‘Creative Destruction’ stressed on the role of technology in bringing about a positive economic change. He termed innovation as an economic activity to implement invention that is scientific and technological advancement, while his major focus remained on the ‘diffusion’ of the developed technologies. 

In the last two decades, the economic debate regarding technology has been more centered around resilience, scalability, sustainability, and building nexus with numerous other themes of global concerns. Technology has been a key component of the export basket of many countries leading to a sharp rise in national incomes. While profoundly analyzing this emerging trend, economies are putting in place effective policies and structures leading to ease of doing business for tech start-ups and relevant tech industry. The Economics of Technology has now been an important subject matter under analysis. Though without inclusion of technology, economic growth and development remains a goal unattained. 

Technology and Impact on Governance 

Technology Governance is a buzz-word in the contemporary context of debates on policy (public and private) and governance (public and corporate). Unlike the traditional governance models prevalent in the public and private domains, technology governance is considered as an instrumental pillar embodying risk-mitigation and resilience-building approach towards growth and development. Digitization has emerged as a changing practice and context of governance in the modern world. In terms of public sector governance, coupled with numerous other factors including international political economy, technology has been a pivotal factor in bolstering the notion of global governance, thus fading out domestic structures amid surging technological diffusion. The top technology players of the world centered anywhere around the globe impact local governance regimes through a holistic approach of technology governance embedded with tools, instruments, and systems. 

E-governance has been implemented across the world as a result of positive feedback from the countries who have adopted the tech governance regime. The technological development in the field of running governmental affairs has enhanced public service delivery, fast-tracked governmental procedures, improved transparency, and introduced accountability, monitoring, and evaluation. This has further resulted in improving the fiscal balance, easing public-sector expenditures, thus enhancing the overall fiscal resilience. Likewise, the public trust on the governance regimes has improved, mainly due to the transparency of technology backed interventions in the public sector domain. 

Corporate governance has always remained more resilient as compared to the public sector governance due to numerous inherent factors that include higher ownership, accountability, transparency, and risk management. Though, technology enhancement in the corporate sector has enabled firms to grow exponentially due to improved structures in place. The corporate world ranging from traditional industries to highly sophisticated consultancy businesses have been immensely impacted by remarkable technological advancements. The AI-powered systems have made processes more effective, resilient, and efficient. The transnational real-time communication, information flows, supply chain automation, and increased interaction has made lives easier for millions of people involved in the corporate sector across the world. The process management, project pipelines, value chain management, HR and Operations management, and the broad based workflow management has been fast-tracked and made effective through numerous technology tools and platforms. 

Thereupon, the notion of global governance is constantly evolving, with emerging challenges and addition of new dimensions to view the global state of affairs. The role of technology in aiding governance can be analyzed in multiple domains from the macro-management of global institutions to the national state management till the lowest tier involving direct public sector delivery. Moreover, profound consideration is being given to rights based digital transformation of a society through innovative tech-instruments. This leads to an imperative notion of ‘governance of the digitization’, which is an integral component to ensure inclusive, effective, and innocuous digital transformation. 

Technology and Impact on Climate Change 

Environment Protection and Climate Change are important policy matters in the arena of public policy and economy. The economics of climate change has become an imperative consideration for economists and policy scientists within the national sphere and international governance. The United Nations has developed numerous legally binding instruments including Conventions, Statutes, Protocols, Guidelines, and SDGs to prioritize climate agenda through effective policy measures and economic support. Similarly, the role of technology has been significant in mitigating climate concerns including carbon emissions, making the supply chains cleaner, sustainable usage of natural resources, and conservation of biodiversity. Moreover, there are several tech interventions in the realm of climate change that include AI for Climate Adaptation, Advanced Computing for Climate Mitigation, Internet of Things (IOT) for Climate Adaptation, and Enhanced Data Analytics for registering Carbon Emissions and Footprints. 

The recent roll-out of the regulations from the EU has aggrandized the need to adopt technological approach to ensure compliance. The EU Carbon Border Adjustment Mechanism (CBAM)’ is a directive by the EU to reduce carbon emissions by putting a fair price on the carbon footprint throughout the production process of goods imported to the EU from non-EU countries. In order to comply with this directive, the non-EU countries are establishing carbon registries and developing dedicated emission trading systems to record and measure carbon emissions. These all responses are technological actions to be undertaken, thus depicting the significance of technology to protect the environment and keep the exports ongoing to the EU. A similar initiative has been taken by the UK as well that requires similar technology action from the global states. 

Moreover, climate technologies or popularly known as ‘Green Technologies’ cover all the renewable means of energy production. The notion of technology transfer becomes imperative in this regard as the economically stronger countries have successfully upgraded their energy architecture from fossil fuels to renewables. Schumpeter’s model focusing on diffusion of innovation becomes central in this regard. In order to ensure a climate friendly energy mix, the surge in green technologies through green financing has become immensely important. 

Furthermore, climate finance has become a critical financial instrument in the global financial system. Environment offers lucrative opportunities for global investors to utilize their investable capital in adaptation and mitigation projects. These investments not just offer attractive ROI/ROE, rather contribute towards climate goals that are universal in nature, and further improve the investor’s outlook. Climate Finance is an important component of an economy in the modern day economic system, thus coupled with technological tools embedded it allows for more transparency and resilience. 

Conclusion

Technology has been a major driver of economic growth and development in contemporary times. Economic models, governance challenges, and climate change vulnerabilities have attracted the influx of technology to resolve complex challenges, thus streamlining processes. Technology is a human intervention, thus relates well with societal ideals and beliefs. The primary purpose of technological intervention in areas of concern was to end discrimination, mitigate vulnerabilities, and ensure sustainable development. Therefore, the objectives are to remain an integral part of the overall growth model of technology in order to craft a long-lasting and enduring impact on the society that stands on the economy as the base, and operates through a rational governance regime. Technology embodies the strength to perform marvels that it has been showcasing since decades, and much more is yet to come in numerous different clusters of human interaction.