There was a time, not too long ago, where the “tech” sector was huge. There was a large group of young, quickly growing companies developing or popularizing new technologies, and an audience of millions of investors eager to get a piece of the action.
Today, we still have this paradigm, to an extent. When people mention “tech stocks,” they’re likely referring to companies like Apple, Microsoft, Google, and Amazon – tentpoles of the core “technology” industry responsible for creating the devices, cloud products, and services that continue to change the way we live and work.
But on another level, this differentiation is becoming somewhat arbitrary. In many ways, every new company in the modern world is a tech company.
How did this change manifest – and does a change in our terminology really matter?
The Need for Core Tech
Every company is a tech company, even if it doesn’t directly innovate new technologies itself. Why? Because modern companies – even those in traditional industries and those operating in a small, niche, local capacity – are practically required to invest in core technologies to operate efficiently.
Consider:
- Websites. Every modern business needs a website. For some, it functions as a digital billboard. For others, it’s a centralized location where your customers can find information, research your top products, and eventually buy from you.
- eCommerce platforms. In line with this, many modern companies sell exclusively or primarily through an online platform. Customers can conveniently add products to a cart and check out online – even if they live halfway across the country.
- Customer portals. Some companies use technology to give consumers more transparency and accessibility; it’s possible for a customer to log in, review past purchases, research their subscription options, and manage their data – all without needing to consult with a human agent.
- Marketing and advertising. Most modern companies rely on tech, like automated bidding platforms and analytics apps to control their digital marketing and advertising. Even if your company still relies heavily on traditional advertising methods, like printing and distributing brochures, you’ll be relying on online platforms and high-tech internal systems to make them a reality.
- Internal communications. Of course, most modern businesses also rely heavily on technology for internal communication systems. Phone calls and text messages are still used frequently, but most organizations need a variety of other high-tech platforms to communicate effectively. These include things like online chat, email, and project management platforms where people can exchange ideas and resources fluidly.
- Internal productivity. It’s also important for modern businesses to invest in internal productivity software to boost the performance of employees. For example, time tracking software makes it easier to account for time spent on various projects and identify points of weakness or inefficiency.
- Tracking and monitoring. Even more importantly, new tech allows companies to track and monitor just about everything. Robust IoT systems allow businesses to keep tabs on their products and inventory at every operational stage. Other platforms can track employee productivity and project progress.
- Social media engagement. Most consumers expect businesses to have a social media presence – even if they’re in a more traditional industry. Social media serves as a public, tech-focused extension of a brand.
- Customer service. Technology also allows companies to provide more in-depth customer service. Customers can self-serve with online educational resources, FAQ pages, chatbots, and live agent chats – or submit a ticket through an automated online system.
- Data analytics. Every business needs to invest in some form of data analytics; it’s the only way to truly gauge how your business is performing, figure out your strengths and weaknesses, and eventually adapt.
Do you know of any operational companies in the modern world that don’t integrate or use these technologies?
Competitive Pressure
Additionally, modern companies face enormous competitive pressure to adopt and harness the full power of new technologies.
- Products, services, and customer appeal. New tech can allow businesses to invest in new products, new services, or other forms of customer appeal. A restaurant that offers online ordering is instantly more valuable and more competitive than another restaurant that only serves walk-in customers (all other things being equal).
- Efficiency and productivity. Technology is also important for boosting the efficiency and productivity of a given business. Even if all you do is incorporate a new accounting system or automate a handful of otherwise manual tasks, you can save yourself hours of time and effort. If a competitor incorporates time-saving technology on a big enough scale, it’s practically impossible for any non-tech-savvy company to compete with them.
- Bottom-line profitability. Better technology also leads to higher bottom-line profitability (in most cases). Assuming the tech offers a modest return on investment, it can save you time, save you money, and help you get more paying customers – all simultaneously. These benefits also tend to compound with the addition of complementary tech products and services.
If all your major competitors are incorporating new tech to see these benefits, how can you expect to thrive in such an environment?
Expansion and Growth
It also stands to reason that any company hoping to expand or grow is likely going to need the help of technology to do it. When it comes to payroll, inventory tracking, accounting, and other critical systems, only scalable, flexible software platforms have the capacity to help a business scale up. It’s technically possible to grow in an entirely manual, effort-powered way, but it’s incredibly difficult to remain competitive with such an approach.
That said, there are some modern businesses that have no intention of scaling – such as local restaurants or bars – so this factor may not apply to them.
Younger Generations
Today’s youngest adults are technically members of Gen Z – also sometimes affectionately called “zoomers.” Our oldest millennials are approaching their 40s, while Generation X is rising to become an elder generation.
Given that even Generation X grew up in a fast-paced technological era, our business environment is now almost completely dominated by young people who appreciate the value that new technology can bring (and who often prefer engaging with technology to engaging with human beings). Accordingly, there’s more pressure – both from business leaders and from employees – to adopt new technology and incorporate it into the core business model.
What’s in a Name?
The term “tech company” may be outdated, given that every modern company relies heavily on technology and must innovate, in some way, to survive. So what? Does this distinction really matter beyond a discussion of semantics?
Changing how we define and think about tech companies could have a variety of positive changes. For starters, “old school” businesses that have historically been reluctant to adopt new technologies or change their business models may feel more pressure.
Understanding that their company is, in fact, a “tech company,” whether it started that way or not, can lead to a meaningful reimagining of the company’s operations and internal culture.
This could also force us to redefine and segment the existing “tech sector” (as it exists in its purest form). Describing a company as a “tech company” is no longer meaningful. It’s important to create new broad segments and classifications that allow us to have better conversations and conduct research that matters.
Additionally, this idea establishes a new precedent – that you don’t necessarily have to invent an entirely new technology to be an innovator in the tech space. Instead of creating an entirely new product or service, you can merely change how you use products and services that are already on the market.
In some ways, this discussion is largely subjective; whether or not a company is described as a “tech company” is somewhat arbitrary, since it doesn’t directly change what the company does or who its target audience is.
Still, it’s valuable to reestablish just how dependent on technology modern companies are – and reinforce the true value of tech innovation, even within traditional types of companies.
Image Credit: pixabay; pexels
