I believe the primary objective for the study of economics is in order for us to find more and more efficient ways to utilize resources. The undeniable fact that man has an almost infinite want, coupled with the finite resources Mother Nature could offer, has led man to resort to ingenious ways to find satisfaction. As this paper aims to highlight the relationship between the study of economics and engineering, much is to be said about solving the problem of limited resources. This would perhaps be the most obvious connection between engineering (specifically, electronics communications engineering) and economics.
As discussed in class, it is technological change that brought about increased in production output in every economy. Graphically, it is marked by a shift in the curve in the production function graph. Practically, it means more output produced by firms for the same amount of input.
Technological change is classified in to two; process innovation and product innovation. Electronics has changed the way production is done. With the invention of computers, photocopiers, CD burners, microprocessors, robots and the like, production became faster and cheaper. The workplace has never been this safe; utility of inputs has never reached this level, until now. Efficiency rose all because of technological advancement.
Electronics and communications have also contributed to the improvements of various products such that new levels of satisfaction are reached. Satellite and cable broadcasts gave us more choices of better shows and GSM technology has brought Filipinos their favorite past time (texting). This field of engineering has, indeed, raised the living standards of many.
On top of what has been discussed, engineering has also changed the face of the market. Not very long ago, we had only one picture of a market, a noisy, crowded place in a town where wares and goods are bought and sold. Now, we have a whole new concept of market. E-bay and Value Vision have been common household names. Now good are showcased over the internet or in television broadcasts. Purchases, too, are made over the phone or the internet. There are, in fact, some firms who no longer have “real” stores and rely solely on their cyberspace stores.
Markets have not only got different but also a lot bigger. It is now possible to talk of a global market. Globalization is, in fact, only possible through better communication networks. Satellite communications and fiber optic technology have made transactions to be possible between two people on the opposite sides of the globe. Communication is not only possible but also clearer and more different kinds of information could be exchanged between multiple parties. Teleconferencing, for example, is a big blessing especially for multinational companies. Growth of imports and exports and international mergers owes a lot to good and quality communications. Thus, we have seen local markets closely tied to the rise and fall of the international market.
It is not only the markets that went through a lot of change. The popular mode of exchange also was greatly affected by technological change. We once got tired of exchanging cows for sacks of rice so we had the brilliant idea of minting coins and then later on, paper money. Now, we are beginning to get tired of carrying money. And the solution? Electronics presents to mankind electronic cards with magnetic tapes or microchips that carries information of how much money value it is “loaded” with. ATM cards and credit cards are examples of this. Money flow has reached an all-time high. Purchases and exchange of goods was made easier and safer especially for large transactions. Not only was it bulky to bring along huge sums of money but it was also unsafe, that is why today, electronic cards are as good as cash.
A study of economy without taking into account the latest development in technology would prove to be inadequate. Without the basic understanding of what used to be just technicalities for engineers, one would not be able to completely grasps the workings of the modern economy.
After we have discussed how electronics and communications engineering has affected economics, we have yet to say a bit about the other way around. It is observed that economic growth leads to technological advancement. As firms are driven to find ways to increase profit, they are motivated to stimulate research and development in the field of engineering. With this in mind, the engineering sector should take advantage of the demands in the economy. In other words, the patrons of engineers are firms and thus the knowledge of current market activities will definitely help engineers. For example, the boom in the local telecommunication industry should prompt engineers to produce goods that the market wants. And indeed, we have seen the emergence of cell shops, and products like backlights for cell phones. Therefore, a fundamental understanding of economics, especially consumer demand patterns, would serve as a guide for innovations. After all, what good is innovation when no body is going to use it?
For a soon-to-be engineer like me, the concepts in economics are handy not only for everyday life. Economics and engineering together partake in an interplay towards the betterment of the lives of men. For millennia, we have tried and succeeded (in some degree) to do such. In the end, as what my previous teacher would use to say, it’s all about economics.