Advances in technology and competition

by R. Morris Coats

Bayou Business Review, 1/11/99 p. 25

I was less frustrated when I put together a swing set at 2:00 A.M. Christmas morning two years ago. Frustration this Christmas came from my own present, a new hard drive for my computer. I did something wrong and messed up the registry, whatever the heck that is, and had to back up and reinstall everything. The hard drive is still not connected. Though all this new computer technology can get frustrating, it really is changing the way we live, the way we work and the way we play. Profit seeking is at the root of this change.

That computer technology has changed our lives is easy to see. For instance, instead of mailing this column in or personally delivering it to Fred Reinecke, my editor, I write at home and e-mail it to him from my home. In my teaching, I have a web site set up for my students (at www.geocities.com/WallStreet/Floor/5316—be careful, the address is case sensitive), which gives them e-mail access to me for questions, notes, study guides, a private grade reporter, course materials and most of my columns, as well as links to pertinent material at other web sites around the world. In my research with authors from other universities, I am now able to send and receive data and drafts of papers for revisions via e-mail.

Family members who live far apart are now better able to stay in touch. I hear from my sister in Houston much more often now that she has an Internet connection. I even hear from my brother in Bayou Vista more frequently. The new computer technology allows families to be closer in other ways, as well.

My brother-in-law is a civil engineer for a firm in Phoenix where he lived for several years. His most notable project with that firm over the past several years has been the new Diamondbacks stadium, where he was one of the design engineers. Before the project was complete, he almost quit the firm even though he liked the work, the firm, and his pay. He almost quit because he missed living in south Louisiana and wanted to return.

His work was 95% behind a computer with little time spent on site. His employer, instead of losing him, allows him to do his work from his home, which is now in Youngsville, Louisiana, across a fence from one brother and a few blocks away from another brother.

Recently I read a story in the paper that sounded like something of Reader’s Digest. A yachtsman from Russia in a solo race around the world developed an infection in his elbow. The amazing thing in the story is that he performed surgery on his elbow with no anesthesia while he was alone in the South Pacific. He received step-by-step directions for the surgery from a U.S physician via e-mail.

It may even be too obvious to mention that while oil prices are at record lows, oil exploration continues in deep water areas, albeit at a lower level than last year. Ten years ago, such prices meant shutting the oil industry down in the Gulf. Part of the reason why this is not happening now is advances in seismology technologies that are dependent upon our new computer capabilities.

Granted, not all of the advances in computer technology have been spiritually lifting. Purveyors of smut and hate have made use of the Internet. But as parents become concerned about what our children may see or read on the Internet, parents have become equally concerned about what tidbits they see on TV or read on the front page of the newspaper, as every detail of the President’s "x-capades" are revealed.

Still, new technologies are extending our abilities to learn, to play and to work. All of these are things we want to do, things we pay to do (not just in frustration costs, but in dollar costs, as well). The profit motive drives entrepreneurs to create ways to extend our abilities.

Competition enhances the technological drive. To gain and sustain a competitive advantage in a market, firms must innovate or risk being made obsolete. Sometime in May of the past year, the editorial cartoonist of the New Orleans Picayune illustrated the point well. The cartoon showed the Post Office announcing a price hike and people responding "who cares?" as they sat at their computers poised to send e-mail. It has now become inconsequential that the Post Office, with a constitutionally protected monopoly, raises its prices.