In each industry, technology determines industrial structure, which Essay

In each industry, technology determines industrial structure, which determines the conduct of firms, which in turn determines the performance of firms. Explain and critically evaluate this statement - Essay Example However the reflection of this relationship would be quite clearly evident in relation with the entity’s market performance. In a larger macroeconomic context, such technological changes are in a broader sense expected to make impacts in the economy my as well. The level to which technology would affect the performance of an industry is however heterogeneous. This would mean that the micro level response of various firms to technological innovations and policy changes would vary to a larger extent (Smith K ,1999). However while analysing the macro level relationship, an evident sign of linkage can be found between the industry’s performance in the global scenario and the technology. This linkage has been found in the history of any industry. To understand the relevance of this statement the replacement of many traditional hand driven industries with automated technologies would be an ideal example. Ranging from agriculture to oil mining, technology always has changed the face and structure of the specific industry as per the standards of the age. However it is true that there are many other factors which drive the technological innovations specific to each industry. From the experiences in the history, it is quite evident that technology would bring massive change in the industrial structure both generic and specific to individual firms. Along with the relation of the structural changes with the performance of individual firms, it also important to understand the integration of these individual changes into complex social and economic relationships with their environments (Smith K ,1999). There are number of theories explaining the macro effect of the structural changes in the industry in relation with technology. This theory is based on the disequlibrium growth model based on creative destruction. It clearly proves the relationship of performance and growth of the industry with the introduction of substantial changes in