Technological environment refers to the state of science and technology in the country and related aspects such as rate of technological progress, institutional arrangements for development and application of new technology, etc.
According to the well known economist J.K. Galbraith, technology means, “systematic application scientific or other organized knowledge to practical tasks”.
Technology comprise both machines (hard technology) and scientific thinking (soft technology) used to solve problems and promote progress. It consists of not only knowledge and methods required to carry on and improve production and distribution not goods and services but also entrepreneurial expertise and professional know how Technology includes inventions and innovations.
UNCTAD has described technology as “systematic knowledge for the manufacture of a product, for the application of a process or for the rendering of a service and does not extend transactions involving mere sale or lease of goods”.
The main features of technological environment are as follows :
(i) Technological environment like political, social or other types of environment is a component of macro or indirect action environment.
(ii) Technology is changing very fast. In fact technological change has come so fast that people find it difficult to tolerate it and cope with it. This has caused a ‘future shock’. The time lag between generation and implementation of a ‘future shock’. The time lag between generation and implementation of new ideas is decreasing fast.
(iii) Technology has far reaching effects. People cannot escape technological change whether they are prepared for it or not. Technology affects the manner in which the resources of the economy are converted into output. Changes in technology affect production process, methods and raw materials used in the manufacture of a product.
(iv) Technology feeds on itself, i.e., it is self-reinforcing. Technology acts as a multiplier to encourage its own development. An invention in one place leads to a sequence of inventions in other places. For example, the invention of streams power led to several other inventions.
Technology is different from science though the two are inter-dependent. Science means systematized body of knowledge whereas application of such knowledge is called technology. Advances in science help develop new technologies, need for technologies and products provide the drive for new scientific discoveries.