Inflation and Technology — How Technological Advancements Can Mitigate the Impacts of Inflation
Inflation is defined as the rate at which the general level of prices for goods and services rises and, subsequently, purchasing power falls. In recent years, inflation rates have dramatically increased due to factors such as energy price surges, increased labour costs, supply-chain bottlenecks triggered by COVID-19, geopolitical tensions, and a focus on energy security.
Technological advancement plays a significant role in mitigating the impacts of inflation.
Technology can reduce operational costs, improve efficiency, and enhance productivity, thereby countering the inflationary pressure on economies. Companies can leverage technology to control their expenditure and maintain profitability in inflationary scenarios. The emergence of automation, digitization, artificial intelligence, clean energy, and mass energy storage as prominent “deflation enablers” is an example of how technology can manage and reduce business costs.
Adopting technology to enhance productivity is generally more robust in developed nations, where infrastructure is already advanced. The focus in these economies is on upgrading existing assets to modern, more efficient standards, with an emphasis on automation and digital solutions. The high cost of labour and…
