Technology in the New Economy and the New Entrepreneurs

Abstract

This article argues that the globalization of markets and the rapid technological change that characterizes the “New Economy” is neither casual nor induced by scientific advances alone. The internationalization of business activity has forced entrepreneurs to reinvent themselves into new entrepreneurs to respond to the rapid maturity of traditional domestic markets. This fact, more than anything else, has allowed entrepreneurs, not only, to go beyond their national frontiers to place their unsold domestic production, but, to use technology in a new way to remain competitive at home and abroad. The progressive shrinkage of demand caused by the growing maturity of domestic markets, has led to a progressive expansion of supply which forced entrepreneurs to come to terms with a new market paradigm of consumer sovereignty. In this new context, quality more than price, has come to determine firms´ competitive advantage not only in the domestic but in the international markets. Although technological advances have supplied firms with the tools and instruments needed to generate the shift from Economies of Scale to Economies of Scope, entrepreneurs have had to reinvent how to use the new technology to render manufacturing systems more flexible and competitive. This article will argue that, although, technology is necessary to bring about Flexible Manufacturing Systems (FMS), the role of the entrepreneur remains central when it comes to implementing flexible organizational structures that integrate men and machines. Technology alone cannot generate the expected changes because technology is only a means to and end and not the end itself. This paper will conclude pointing out that competitive advantage in the “New Economy” depends, not so much, on the adoption of technology, but on how technology is used by entrepreneurs. The way entrepreneurs adopt, integrate and use technology will determine the new entrepreneurs’ competitive advantage and shape the organizational structure of firms in the New Economy.