Components of High Technology Industries

7.1: Components of High Technology Industries

• Definition of High Technology: High technology industries leverage rapidly advancing scientific knowledge to produce goods and services.

  • Significant advancements in attributes of products and services.

  • Unique characteristics compared to low-tech industries.

• Examples of High Technology Industries:

  • Computer Industry: The classic example, characterized by constant innovation.

  • Telecommunications: Innovations in wireless technology and Internet have transformed the industry.

  • Pharmaceuticals: Impact of cell biology and genomics on drug discovery processes.

  • Power Generation: New technologies in fuel cells and renewable resources changing industry economics.

  • Aerospace: Use of advanced materials and technologies to create more efficient aircraft.

• Economic Impact:

  • Information technology accounts for about 10% of the U.S. GDP.

  • Underestimates true effect due to technological influence in healthcare, transportation, etc.

  • Low-tech sectors becoming more high-tech (e.g., biotech transforming agriculture).

  • Online retailing changing traditional retail dynamics.

• Industry Dynamics:

  • Characteristics of high-tech sectors include winner-take-all dynamics, where standards matter significantly.

  • Firms often face different strategic needs compared to traditional industries.