Impacts of ICT on Productivity

Considerations Where ICT Can Increase Productivity

Reducing Costs

ICT systems can reduce costs by reducing labour costs such as those from automation or reducing material costs such as digital data eliminating the costs associated with printing paper.

​Increased Flexibility

ICT systems can improve flexibility through cloud technology enabling employees to work remotely beyond business premises, eliminating lost productivity from transportation.​

Increased Capabilities

ICT systems can extend what is possible for businesses, such as giving businesses communication advantages with virtual communication allowing managers to quickly establish lines of communication with employees.

Considerations Where ICT Can Decrease Productivity

Increased Employee Distractions

ICT enables easier access to distracting websites such as social media, online video and online gaming websites. The portability of ICT devices such as phones has made it easier than ever to access distracting content.​

Greater Employee Vulnerability to Advertising

ICT advances have enabled greater target advertising, with advertisers able to promote products/services based on a user's personal characteristics and interests. Greater vulnerability to advertising can lead to lost productivity.​

Greater Dependency on ICT Systems

Failure of an ICT system could lead to lost productivity. For example, if the internet access of a business was disconnected then employees would be very limited in their ability to work.

Impacts of ICT on Access to Knowledge and Resources

Positive Impacts on Access to Knowledge and Resources

Enables Access to Knowledge Through User Generated Content

Anyone can share their knowledge and expertise on the web. Websites such as Wikipedia and Reddit enable people to share their ideas and questions.

Specific websites also allow users to assist one another, such as:

• Stack Overflow - Allows developers to share code and discuss solutions.

• Pixabay - Enables everyone to access royalty free images for their projects.

• Payscale - Enables users to submit their salary in return to recieve salary data on current and potential roles at different organisations. 

Provides Access to Free Content

A lot of resources on the web (including our website), provide any user access to an abundance of information for free. This reduces the financial barrier to access.

Enables More Interactivity With Content

Online content can also be more interactive through the use of videos, quizzes and virtual reality. For example, CodeAcademy, a platform that teaches coding, enables users to submit actual code in their virtualised platform, enabling real-time feedback.

Negative Impact on Access to Knowledge and Resources

Widen Digital Divide

While there is an abundance of resources available, the divide between those who can and cannot access will continue to get larger.

Difficult to Verify / Lack of Credibility

While the web enables anyone to write and publish content, this content can be false or misleading. The rise of fake news, for example, has been attributed to people sharing misinformation that is perceived as legitimate. 

ICT Impacts on Outsourcing

Outsourcing is the process by which products/services are provided and contracted by an external provider. For example, a call centre being delivered from another country. ICT enables global outsourcing, providing companies with the ability to access talent from around the world. 

Advantages of Global Outsourcing

Global outsourcing also offers benefits including:

• Lower company tax rates - businesses may be able to save money by producing elsewhere to take advantage of lower company tax rates such as Ireland at 12.5%, Germany at 15%, Cambodia at 20% while Australia's company tax rate is 30%

• Lower regulation and red tape - other countries can have significantly fewer barriers to production. For example, outsourcing can avoid strict environmental, planning and employee regulation.

• Lower wage costs - Australia has relatively high minimum wages. Outsourcing can take advantage of lower wage costs in developing countries.

• Access to expertise - Skill shortages can enable companies to access outsourced talent from around the world.

• 24/7 workforce - Different time zones can enable workers to operate different shifts, enabling service 24/7 for companies with a global footprint.

Disadvantage of Outsourcing

The main disadvantage would be the displacement of local workers, who may lose jobs or experience to other lower-paid offshore workers. There may also be less regulation to protect offshore workers, potentially exposing them to higher exploitation risks.