What Are the Costs and Benefits of Technology?

September 11, 2023
David Sunnyside

Indirect costs of technology can include sunk investment, lost revenue, time spent on training and ineffective use of the tool. These types of costs should be reflected in the budget as they can have an impact on the success of the project.

The benefit of technology is that it increases productivity and makes the work easier. In some cases, technology can also reduce the number of employees needed for a specific task. For example, in construction projects, drones and humanoid robots allow companies to build in extreme conditions or difficult to reach terrains with less effort and safety risks.

Another benefit of technology is that it improves health and prolongs life. The Covid-19 vaccine is a great example. Applied to medicine, technology also allows doctors to diagnose patients and develop targeted treatments that increase the chances of a positive outcome.

Nevertheless, the benefits of technology cannot be considered without its costs and the cost-effectiveness of each tool is an important aspect to consider before implementing new technologies. However, it is often challenging to assess the cost-effectiveness of a medical device. The reason is that current reimbursement systems give physicians incentives to adopt technology beyond the point where marginal costs equal marginal benefits.

Furthermore, residual approaches do not easily identify the precise source of cost increases. For instance, an increase in the cost of a particular treatment might be caused by several factors that could not be readily identified, such as price inflation or demographic changes.

David Sunnyside
Co-founder of Urban Splatter • Digital Marketer • Engineer • Meditator
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