The Disadvantages of Technology in Business

Written by gregory hamel
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The Disadvantages of Technology in Business
Technology can increase production, but it comes with high upfront costs. (global technology image by patrimonio designs from

Technology is an important part of running a business. Production of goods and services depends largely on technology that increases worker productivity. In many cases upgrading to new technologies can effectively boost output and save the expense of hiring new workers. Despite potential long-term advantages, technology has several notable drawbacks.

Upfront Cost

New technologies sometimes involve high upfront costs. Hiring new workers can be relatively cheap in the short term compared to the financial outlay required to purchase technology. A new worker typically works a few weeks or a month before he is paid, meaning the worker generates income before a company has to spend money. Technology requires a large initial investment before the technology actually assists with production.

Training Cost

Companies installing new technology must bear the cost of training workers to use it. Upgrading from an existing technology to a new one slows productivity in the short term. In some cases, new technologies may not be more efficient than old technology, which can result in wasted investment and training hours. For instance, many businesses opt to run their computers on outdated operating systems and software, even though upgrades are available. Converting to new software takes time and money and the benefits might be minimal.


Technology may allow one worker to produce the same amount as two or three workers without technology. This increase in productivity can make certain jobs obsolete or redundant, leading to layoffs and unemployment. Furthermore, once the initial cost of installing new technology has been paid, the cost of maintaining the technology is often lower than the cost of paying for an equivalent amount of labour productivity. Long-term saving make technology attractive to large businesses, sometimes to the detriment of workers.

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