Network Externality In Textile Industry

984 Words4 Pages
Network externality effects in capital goods industry In today’s economy, network effects arising due to technology standards are quite important because there is a great degree of interrelation among different technologies. A technology has a network effect when the significance of the technology to a subscriber increases with the number of total subscribers in the network. Network effects in adoption can rise from two different but correlated reasons, often regarded as direct and indirect. Direct network effects are existent when a user’s utility from using a technology directly escalates with the total size of the network. Indirect network effects also arise from increased utility due to bigger network size, but in this situation the increase…show more content…
The fiber and textile making and the manufacture of clothing lead to the industrial development in the developing world. The technology made the machines to be easier to use and speed up the process, it also used technology to new modes of clothing production based on the systems cost and productivity. The application of these new technologies made a deep social impact not only on the workers but also the location of those employees in clothing production. The technology such as CAM, CAD, manufacturing management and information technology systems enable many changes in the women’s fashion and textile industry. By improving the labor productivity and reducing overall manufacturing costs, the clothing industry perceived the need of industrialized countries. Increase in the overall network of the textile industry improves the usage of technological advancements and consequently improves productivity and utility derived. Therefore, there is positive network externality effect in this industry. 3. Construction and mining…show more content…
As newer technologies emerge, the ease of installation and utilization of construction tools improve. For instance, '"Next generation mining" is transforming operations that were once manual, local and silo-ed into those that are automated, remotely ran and integrated. Increasingly, a step alteration in productivity is being provided through Integration of tools with information technology. The usage of unmanned vehicles or "autonomous" haulage for earth moving is a step in that track. These earth movers are equipped with CCTV cameras, GPS, inertial guidance systems and influence dispatch route planning and control software for functioning. Several international mining players are already shifting towards such innovative means of autonomous haulage. 4. Process plant machinery The process plant machinery and components sector in India is a very heterogeneous segment of capital goods industry. The industry supplies to a wide variety of process industries like petroleum refining, oil and gas, petrochemicals, fertilizer, pharmaceuticals, chemicals, metal industry, cement, cryogenics, distilleries paper, sugar etc. The network externality effect in this industry is lower than the other sub sections of the capital goods industry as the industry is quite fragmented in nature. Use of a novel technology does not necessarily improve the utility/ ease of installation of a new unit of production in the process plant machinery industry.
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