Other Influences on Industry Growth, Profitability, and Risk
{"Image DocumentName": "Other Influences on Industry Growth, Profitability, and Risk", "Image ImageDescription": "Examples of Technological Influences. Invention of the microchip. Digital imaging. Examples of Demographic Influences. Baby Boomer generation. Aging populations. Examples of Governmental Influences. Tax policies and government spending. Regulation. Examples of Social Influences. Changes in tobacco consumption. Women in the workforce. LOS: Illustrate demographic, governmental, social, and technological influences on industry growth, profitability, and risk. Pages New technologies create new or improved products that can radically change an industry and can also change how other industries that use the products conduct their operations. The computer hardware industry provides one of the best examples of how technological change can affect industries. The 1958 invention of the microchip (also known as an integrated circuit, which is effectively a computer etched on a sliver of silicon) enabled the computer hardware industry to eventually create a new market of personal computing for the general public and radically extended the use of computers in business, government, and educational institutions. Another example of the effects of technology on an industry is the impact of digital imaging technology on the photographic film industry. Since their invention in 1981, digital cameras have become extremely popular and now widely outsell traditional film cameras (although many professional photographers continue to use film for esthetic reasons for certain applications). Changes in population size, in the distributions of age and gender, and in other demographic characteristics may have significant effects on economic growth and on the amounts and types of goods and services consumed. The effects of demographics on industries are well exemplified by the impact of the post\u2013World War II Baby Boom in North America on demand for goods and services. Born between 1946 and 1964, this bulge of 76 million people in the North American population has influenced the composition of numerous products and services it has needed in its passage from the cradle through childhood, adolescence, early adulthood, middle age, and into retirement. Another example of the effects of demographics on industries is the impact of an aging population in Japan, which has one of the highest percentages of elderly residents (21% over the age of 65) and a very low birth rate. Japan\u2019s ministry of health estimates that by 2055, the percentage of the population over 65 will rise to 40% and the total population will fall by 25%. Governmental influence on industries\u2019 revenues and profits is pervasive and important. In setting tax rates and rules for corporations and individuals, governments affect profits and incomes, which, in turn, affect corporate and personal spending. Governments are also major purchasers of goods and services from a range of industries. Governments exert their influence indirectly by empowering other regulatory or self-regulatory organizations (e.g., stock exchanges, medical associations, utility rate setters, and other regulatory commissions) to govern the affairs of an industry. By setting the terms of entry into various sectors, such as financial services and health care, and the rules that companies and individuals must adhere to in these fields, governments control the supply, quality, and nature of many products and services and the public\u2019s access to them. Societal changes involving how people work, spend their money, enjoy their leisure time, and conduct other aspects of their lives can have significant effects on the sales of various industries. Tobacco consumption in the United Kingdom provides a good example of the effects of social influences on an industry. Although the role of government in curbing tobacco advertising, legislating health warnings on the purchases of tobacco products, and banning smoking in public places (such as restaurants, bars, public houses, and transportation vehicles) probably has been the most powerful apparent instrument of changes in tobacco consumption, the forces underlying that change have really been social in nature\u2014namely, increasing consciousness on the part of the population of the damage to the health of tobacco users and those in their vicinity from smoking, the increasing cost to individuals and governments of the chronic illnesses caused by tobacco consumption, and the accompanying shift in public perception of smokers from socially correct to socially incorrect\u2014even inconsiderate or reckless. In 1870, women accounted for only 15% of the workforce in the United States outside the home. By 1950, after two world wars and the Great Depression, this figure had risen to 30% (it had been even higher temporarily during WWII because of high levels of war-mandated production) and by 2008, to 48%.", "Image XResolution": "37", "Image YResolution": "37", "Image ResolutionUnit": "Pixels/Centimeter", "Image Software": "SlidePlayer", "Image YCbCrPositioning": "Centered"}