The Advantages of Technology Specialization
- Specialization in a particular technology is increasingly important in a business climate characterized by movement towards even more complex technology. Especially in businesses that rely on computer technology, a detailed knowledge of specific software or hardware is vital to operating and maintaining core business processes. Technology specialization is present on individual, business and national levels. For example, many businesses now have dedicated IT staff who work solely on maintaining technology systems. Entire countries may build their economies around the production of a core piece of technology like microchips or central processing units. Broad-based businesses with operations in multiple product verticals are becoming rarer as comparative advantages are increasingly found in focusing the business on producing a particular component or subcomponent of a larger system.
- It is often a wise allocation of time, energy and resources for an individual to specialize in a particular range of technologies. Databases, websites, software and hardware are all growing more complex and it can be inefficient to devote the time needed to fully understand each technology available. Individuals are finding it profitable to focus in specific programming languages or software packages to maximize their expertise relative to generalists who try to learn it all. Many applications and hardware components are very powerful but their potential can only be maximized when operated and maintained by an individual with specialized skills. Such a person can have an advantage in securing employment if depth of knowledge in a particular technology can be used to improve business profitability.
- For businesses and individuals, specialization in certain technologies can be very important in maximizing profitability. Fewer businesses follow the Sears Roebuck model of the early 20th century and offer a wide variety of products to customers because it is usually more efficient to specialize in one product area. Production of components is likewise often best accomplished by a factory under the control of a company that is equipped to produce one type of item very efficiently. By specializing in a particular technology like microchip production, a business can focus on making existing processes as efficient as possible and lowering production costs. These lower costs can be passed on to consumers to drive sales or accumulated as profits that can be reinvested in the business.
- The idea of comparative advantage makes technology specialization very attractive for economies that have access to resources or processes that are particularly valuable to their industry. Taiwan is a huge producer of electronic components used in computers such as microchips because it has specialized in the production of these technologies, and can do it cheaper than rivals in other nations can. Countries like Israel are known for exporting military technologies that are highly adaptable for the same reason. In addition, the United States is a hotbed of software development because of the depth of its human resources in the arena of skilled programmers and mathematicians who are on the cutting edge of algorithm development. Lastly, the example of Japan is instructive -- the Japanese economy is renowned for its ability to produce highly sophisticated robotic technology. Specialization in this area is an advantage that has made Japan a leader in robotics.
