Why its unfair to say technology is expensive.

Quite a number among us bemoan why technology is expensive, and that keeps the poor, poor; widening the inequality gap, blah blah. Maybe we should remind ourselves why technology is expensive in the first place, along with healthcare and education.

Time is one of the most important costs to any producers. While consumers go to any shopping mall and simply browse through to get what products they want, producers cant produce what they want instantly. Time is required to research a product, develop it, and market it. Meanwhile, you incur additional costs trying to buy a factory to make the product, and not to say, for innovators, you need time for the idea to come to you in the first place. Time is a uni-directional costs. Once invested, its considered sunk costs. For the innovator, he can come up with millions of ideas, but only one of them will work in the end. Hence, technology is expensive, not really in the money sense, but more in the time and energy used up by the human being who first tried to make something.

Clearly, once he has got the idea right, and starts to actually produce the product, he will want some form of compensation for the immense amount of effort that he has put in beforehand. Like any craftsman, he will demand a high price for his product. Moreover, he cannot really predict how much revenue his product will bring over the next few years. All he can do, is to mark up the price of the product, hoping to cover costs quickly.

This is where the bone of contention comes in. Consumers demand that technology should be made cheap so that the poor can benefit. It is akin to asking everyone to donate their excess income and profits to charity. While it is certainly a very good gesture of altruism, we can do no more than to hope for this unrealistic situation. We are after all, greedy and selfish people. Moreover, the higher prices reflect the greater quality of the new product, showing that people should therefore, be more willing to pay higher prices for a product of better quality.

Not that prices of technology should stay high forever. The high demand, and revenue, might prompt other people to jump into this new field. These people, do not have to develop their new and fresh idea. They just need to imitate the new technology. To them the costs are then really quite low. As more and more people jump into this profitable field, they compete with one another, and push the prices of that technology downwards. This happens the moment the patent rights of the technology expire, or with sufficient ingenuity, competitors can even imitate the product even when the patent rights are in effect.

Its the same with healthcare, after the longer period of time required to study the knowledge required to carry out medical duties, the least the doctor wants, is some form of compensation for the greater time and effort he spent to get into the field. I do not approve of doctors who became one just for the potential revenue it brings of course, but its the reality. No amount of whining, taxes, and government legislation can change a fundamental human flaw.