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?
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.
Do you know of any operational companies in the modern world that don’t integrate or use these technologies?
Additionally, modern companies face enormous competitive pressure to adopt and harness the full power of new technologies.
If all your major competitors are incorporating new tech to see these benefits, how can you expect to thrive in such an environment?
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.
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.
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
Originally appeared in ReadWrite