Previously the three main factors of production used to be land, capital and labor but now the significance of these alone has decreased because these three factors, for most industries, are not enough for a successful business. The main three factors of production now are time, capital, and information. Capital remains to be an important factor in any economy because it is vital for an entrepreneur/government to effectively utilize it.
Time has become an important factor of production as competition is now directly related to time and speed. Many of the new advancing technologies focus on speed: processing speed, fast and efficient customer service, these are few of the factors that lead to success in organisations.
The next new factor of production is Information. The abundance of information that is available is increasing at a fast rate and it is important to be able to efficiently make use of information. It is crucial to recognize and use the 4 V’s: Velocity, veracity, variety, and volume. Volume is the amount of data that is being saved and used. Velocity is the speed at which this information is to be used.
Variety is the various data type that is required; because, for strong competition, it is important to be able to use the right data type. Lastly, veracity is the authenticity of the data which is vital as it can cause poor decision making. Understanding and using the four V’s helps entrepreneurs to efficiently utilize the information to compete in the global market.
Nowadays succeeding in the global economic market is based on the different ways in which the two new factors of production are used. Data-driven applications provide innovative ideas from the information that is being used. The efficiency of these data-driven applications is due to the usage of the 4 V’s. It is important to accept the new changes to the primary factors of production as it affects economic growth.
Reference
Gentile, Brian, and Savitz Eric. “The new Factors of Production And The Rise of Data-Driven Applications.” Oct 31, 2011. https://www.forbes.com/sites/ciocentral/2011/10/31/the-new-factors-of-production-and-the-rise-of-data-driven-applications/#1cb16ab517da
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