INSTITUTE OF MANAGEMENT TECHNOLOGY, GHAZIABAD

HRIT GROUP 8
BUSINESS ENVIRONMENT PROJECT REPORT
ON

EFFECT OF TECHNOLOGY
ON
INDIAN BUSINESS ENVIRONMENT

Prepared By:
Ankita Bhargava 09HR-005
Ankur Arora 09HR-006
Megha Latawa 09HR-011
Dr. Nisheeth Kumar 09HR-014
Shubham Kapoor 09HR-023
Mallika Kulkarni 09HR-032

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 INTRODUCTION

Technology relates more to technique of production or application of scientific know-how to

improve the quality and quantity of the product and production process.

Technological environment consists of

a) State of domestic or indigenous technology

b) Facilities for Research and Development

c) Technical Collaborations etc.

A study of technological environment is very essential due to following reasons:

 The rate of technological development is much faster than its acceptance and
absorption by the society. If the business firm fails to take a note of those changes,
and does not replace old technology by new ones, it would certainly affect the
survival and growth prospects.
 Advances in technologies have made it possible to improve quality of product,
increase output and reduce the cost of production. Use of latest technology will
enhance the marketability of products and face competition effectively.
 Technology can be used to carry out more risky and hazardous jobs in factories more
efficiently and safely. The use of computers and robots is beneficial to increase
productivity and reduce industrial accidents.
 Despite certain deficiencies, development and use of newer technology is bound to
influence the environment of business. Business enterprises have to analyze
technology environment, technology options, cost-benefits of technology alternatives,
adopt and absorb new technology, use it to collect data, design product, improve
productivity and finally serve the consumer in a better way.

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 Technological Environment in India

The government has realized the importance of technology in development plan and has
accorded high priority. The following measures have been taken by the government to
develop indigenous technology and import technology from outside.

 The government gives incentives and provides financial and other assistance to
upgrade obsolete machines or technology.
 Foreign collaborations for import of technology are given more importance.
 The import of computers and modem technology is allowed at reduced rates of import
duties.
 The government wants bridge the technology gap and thereby improve the quality of
output. In the long run it will help Indian companies to compete successfully in the
domestic and international market.

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TECHNOLOGICAL CHANGE IN CELLULAR INDUSTRY

Introduction to Cellular Telephony 

The technology that gives a person the power to communicate anytime, anywhere - has
spawned an entire industry in mobile telecommunication. Mobile telephones have become an
integral part of the growth, success and efficiency of any business and economy.

The most prevalent wireless standard in the world today, is GSM. The GSM Association
(Global System for Mobile Communications) was instituted in 1987 to promote and expedite
the adoption, development and deployment and evolution of the GSM standard for digital
wireless communications.

The GSM Association was formed as a result of a European Community agreement on the
need to adopt common standards suitable for cross border European mobile communications.
Starting off primarily as a European standard, the Groupe Speciale Mobile as it was then
called, soon came to represent the Global System for Mobile Communications as it achieved
the status of a world-wide standard. GSM is today, the world’s leading digital standard
accounting for 68.5% of the global digital wireless market.

The Indian Government when considering the introduction of cellular services into the
country, made a landmark decision to introduce the GSM standard, leapfrogging obsolescent
technologies and standards. Although cellular licenses were made technology neutral in
September 1999, all the private operators are presently offering only GSM based mobile
services. The new licensees for the 4th cellular licenses that were awarded in July 2001 too,
have opted for GSM technology to offer their mobile services.

Cellular Industry in India

The Government of India recognizes that the provision of a world-class telecommunications

infrastructure and information is the key to rapid economic and social development of the
country. It is critical not only for the development of the Information Technology industry,
but also has widespread ramifications on the entire economy of the country. It is also
anticipated that going forward, a major part of the GDP of the country would be contributed
by this sector. Accordingly, it is of vital importance to the country that there be a

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comprehensive and forward looking telecommunications policy which creates an enabling
framework for development of this industry.

Technological Environment influencing the Cellular Industry

The technological development in the cellular industry has been incredible. Some years back
the handsets used to cost somewhere between Rs.30,000 to Rs.40,000. But the evolution in
technology has brought down the prices to Rs.2000 today. Apart from the handsets, the
display screens in the cell phones have also changed. From black and white they have
evolved to colorful display screens with the help of technology. This was about the
evolution in cell phones. There has been equal and outstanding development in the
networking of cellular phones. In other words, the service or network through which the cell
phone can be reached has improved drastically in terms of clarity in hearing and coverage of
areas. The service providers have also increased over a period of time. They are still trying to
cover as many areas they can for the betterment of the consumer. Earlier, the cell phones
were just used for calling purposes. But today, with the advancement in technology, the cell
phones have varied uses from serving as a reminder to a computer. Recently, in the year
2001, camera cell phones were introduced. These kinds of changes project the rapid
development of the telecom industry.
Keeping the camera cell phones aside, latest technology enables the user to connect to the
internet at broadband speeds more than 386kbps. This new technology is known as the 3G
technology. Our very own MTNL will be providing us with this 3G service very soon. This
service enables the user to stream or download audio and video content or applications over-
the-air, including sports highlights, music videos and multi-user games. It also provides the
services of in – built video camera. It also enables the user to participate in live conferences
without missing their 9 – 5 schedule. This new service will be beneficial to the service
providers providing 3G because it would enable them high data applications. This 3G
network will have a capacity of 4 million lines and will be operational next year. The total
investment will tune up to Rs.4000 crores. The company has already started discussions
relating to the equipments and this service will be first started in Mumbai and Delhi. 3G
services have already become popular in Japan, UK, Hong Kong, Australia, Sweden and
Denmark. NTT DoCoMo has a subscriber base of more than 3.5m in Japan. Swedish mobile
service provider ‘3’ has a subscriber base of 350,000 in Sweden and Denmark, adding around
150,000 customers since mid-August. In UK, Hutchison is the 3G service provider. Other

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developments in this field are that now the users can have mobile phones with in built soft
wares like Bluetooth, which enable them to download audio – visual movies and other videos
and then pass the same to other people. Various other soft wares are available like Smart
Crypto, Photo Fusion, Avecradio, Wow Screen, Antithief, etc.
At the most basic level, mobile phones are either analog or digital. Some are both. Today's
mobile phones are primarily digital, especially in India and run on different technologies such
as CDMA (Code Division Multiple Access) and GSM .Code Division Multiple Access
(CDMA) is a very new concept in wireless communications, which has lead to improve both;
the system capacity as well as the service quality.
CDMA is a form of spread-spectrum, a family of digital communication techniques that have
been used in military applications for many years. The core principle of spread spectrum is
the use of noise-like carrier waves, which have bandwidths much wider than that required for
simple point-to-point communication for the same data rate. The CDMA systems are the
latest technology on the market and are quite competitive in terms of cost and call quality.
Many current CDMA systems boast of having at least three times the capacity of GSM
systems. Apart from the soft wares, viruses that affect the computers, similar kind of mobile
viruses have started infecting cell phones. To fight against these viruses, technological
experts have introduced anti viruses. Technology is evolving in many such ways. These were
the technological developments taking place in the cellular industry. Technology always has
a dark side to it. So the dark side can worsen if the misuses are not regulated. Keeping the
misuses and their after effects in mind we have an act called the Information Technology Act,
2000. This Act looks after the misuse of any service provided to the user which is harmful to
the society or the people.

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TECHNOLOCIAL FACTOR IN AIRLINE INDUSTRY

The increasing use of the Internet has provided many opportunities to airlines. For e.g. Air
Sahara has introduced a service through the internet, wherein the unoccupied seats are
auctioned one week prior to the departure.

Air India also provides many internet based services to its customer such as online ticket
booking, updated flight information & handling of customer complaints.

USTDA (US trade & development association) is funding a feasibility study and workshops
for the Airports Authority of India as part of a long-term effort to promote Indian aviation
infrastructure. The Authority is developing modern communication, navigation, surveillance,
and air traffic management systems for India's aviation sector that will help the country meet
the expected growth and demand for air passenger and cargo service over the next decade.

A proposal for restructuring the existing airports at Delhi, Mumbai, Chennai and Kolkata
through long-term lease to make them world class is under consideration. This will help in
attracting investments in improving the infrastructure and services at these airports. Setting
up of new international airports at Bangalore, Hyderabad and Goa with private sector
participation is also envisaged.

A good example of the impact of technology would be that of AAI, wherein with the help of
technology it has converted its obsolete and unused hangars into profit centers. AAI is now
leasing these hangars to international airlines and is earning huge profits out of it. AAI has
also tried to utilize space that was previously wasted installing a lamination machine to
laminate the luggage of travelers. This activity earns AAI a lot of revenue.

These technological changes in the environment have an impact on Air India as well. Better
airport infrastructure, means better handling of airplanes, which can help reduce maintenance
cost. It also facilitates more flights to such destinations.

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TECHNOLOGICAL CHANGES IN RBI INDUSTRY

Say no to 25, 50 paise coins at your own peril

Next time your next door shopkeeper refuses to accept a 25 paise coin, take him to task. In a
categorical statement, the Reserve Bank of India (RBI) has said that all small denomination
coins including those of 50 and 25 paise coins are legal tender and non-acceptance of any
such coins is an offence. Mostly banks under the RBI and shopkeepers are those who
discourage the use of these coins.

Taking a note of this practice by banks, the RBI has advised all banks to desist from any such
restrictive practices. Also, the apex bank has asked the public to assert their right to get
appropriate change and acceptance of all denomination coins by banks in exchange. So next
time, someone plays truant, take him to task.

The RBI after being flooded with complaints against banks reluctant to accept 50 paise and
25 paise coins asked the Birla Institute of Technology (BITS), Pilani, to do a study to suggest
remedial solution. As recommended by the BITS, the RBI has now decided to act tough with
those who refuse to accept the legal tender.

The Government of India has the sole right to mint coins in the country as per the Coinage
Act, 1906. The designing and minting of coins in various denominations is also the
responsibility of the government. The coins are minted at the four government mints at
Mumbai, Alipore in Kolkata, Saifabad in Hyderabad, Cherlapally in Hyderabad and Noida in
UP.

Coins in India are presently being issued in denominations of 10 paise, 20 paise, 25 paise, 50
paise, one rupee, two rupees and five rupees. Coins up to 50 paise are called 'small coins' and
coins of Rupee one and above are called 'Rupee Coins'. Coins can be issued up to the
denomination of Rs 1000 as per the Coinage Act, 1906.

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TECHNOLOGICAL CHANGES IN AUTOMOBILE INDUSTRY

Hyundai Motor India ties up with Tata Indicom

Hyundai Motor India Ltd (HMIL) signed an MoU with telecom service provider Tata
Indicom to facilitate the implementation of its Global Dealer Management System, a software
that will help its dealers stay connected with the company in real time.
Under the five-year MoU signed by HMIL president B.V.R. Subbu and Tata Indicom
Enterprise Business Unit president Sandeep Mathur, the telecom player will enable the
GDMS by providing the Virtual Private Network and VSAT technologies. It will also be the
technological service partner of HMIL to ensure the smooth operation of the GDMS system.
GDMS, a web-based communication software, will enable dealers to place online orders of
cars, spare parts and accessories to HMIL and speed up operations and eventually benefit the
customer. It will initially be run as a pilot on about 20 dealer locations and will be extended
to all HMIL dealers in 305 locations across India by May 2005.

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TECHNOLOGY CHANGES IN FINACIAL ECONOMY

It is surely not news to a group of bankers that the same forces that have been reshaping the
real economy have also been transforming the financial services industry. Once again,
perhaps the most profound development has been the rapid growth of computer and
telecommunications technology. The advent of such technology has lowered the costs,
reduced the risks, and broadened the scope of financial services, making it increasingly
possible for borrowers and lenders to transact directly, and for a wide variety of financial
products to be tailored for very specific purposes. As a result, competitive pressures in the
financial services industry are probably greater than ever before.

As is true in the real economy, it is difficult to overestimate the importance of education and
ongoing training to the advancement of technology and product innovation in the financial
sector. I doubt that I need to tell any of you about the importance of education and training
for employees. But the same is almost surely true for your customers. Surveys repeatedly
indicate that users of electronic banking products are typically very well educated. For
example, data from the Federal Reserve Board's Survey of Consumer Finances suggest that a
higher level of education significantly increases the chances that a household consumer will
use an electronic banking product. Indeed, this survey indicates that, in late 1995, the median
user of an electronic source of information for savings or borrowing decisions had a college
degree--a level of education currently achieved by less than one-third of American
households.

Technological innovation and more sophisticated users have accelerated the second major
trend--financial globalization--which has been reshaping our financial system, not to mention
the real economy, for at least three decades. Both developments have expanded cross-border
asset holding, trading, and credit flows and, in response, both securities firms and U.S. and
foreign banks have increased their cross-border operations. Once again, a critical result has
been greatly increased competition both at home and abroad.

A third development reshaping financial markets--deregulation--has been as much a reaction

to technological change and globalization as an independent factor. Moreover, the continuing
evolution of markets suggests that it will be literally impossible to maintain some of the
remaining rules and regulations established for previous economic environments. While the

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ultimate public policy goals of economic growth and stability will remain unchanged, market
forces will continue to make it impossible to sustain outdated restrictions, as we have recently
seen with respect to interstate banking and branching.

In such an environment, I share your frustration with the pace of legislative reform and
revision to statutorily mandated regulations. Nonetheless, we should not lose sight of the
remarkable degree of re-codification of law and regulation to make banking rules more
consistent with market realities that has occurred in recent years. Deposit and other interest
rate ceilings have been eliminated, geographical restrictions have been virtually removed,
many banking organizations can do a fairly broadly based securities underwriting and dealing
business, many can do insurance sales, and those with the resources and skill are authorized
to virtually match foreign bank competition abroad. Moreover, it seems clear that there is
recognition by the Congress that the basic financial framework has to be adjusted further. The
process, as you know, is not easy when the results of regulatory relief create both a new
competitive landscape and new supervisory and stability challenges.

Change will, I believe, ultimately occur because the pressures unleashed by technology,
globalization, and deregulation have inexorably eroded the traditional institutional differences
among financial firms. Examples abound. Securities firms have for some time offered
checking-like accounts linked to mutual funds, and their affiliates routinely extend significant
credit directly to business. On the bank side, the economics of a typical bank loan syndication
do not differ essentially from the economics of a best-efforts securities underwriting. Indeed,
investment banks are themselves becoming increasingly important in the syndicated loan
market. With regard to derivatives instruments, the expertise required to manage prudently
the writing of over-the-counter derivatives, a business dominated by banks, is similar to that
required for using exchange-traded futures and options, instruments used extensively by both
commercial and investment banks. The writing of a put option by a bank is economically
indistinguishable from the issuance of an insurance policy. The list could go on. It is
sufficient to say that a strong case can be made that the evolution of financial technology
alone has changed forever our ability to place commercial banking, investment banking,
insurance underwriting, and insurance sales into neat separate boxes.

Nonetheless, not all financial institutions would prosper as, nor desire to be, financial
supermarkets. Many specialized providers of financial services are successful today and will
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be so in the future because of their advantages in specific areas. Moreover, especially at
commercial banks, the demand for traditional services by smaller businesses and by
households is likely to continue for some time. And the information revolution, while it has
deprived banks of some of the traditional lending business with their best customers, has also
benefitted banks by making it less costly for them to assess the credit and other risks of
customers they previously would have shunned. Thus, it seems most likely that banks of all
types will continue to engage in a substantial amount of traditional banking, delivered, of
course, by ever improving technology.

Community banks, in particular, are likely to provide loans and payments services via
traditional on-balance sheet banking. Indeed, smaller banks have repeatedly demonstrated
their ability to survive and prosper in the face of major technological and structural change by
providing traditional banking services to their customers. The evidence is clear that well-
managed smaller banks can and will exist side by side with larger banks, often maintaining or
increasing local market share. Technological change has facilitated this process by providing
smaller banks with low cost access to new products and services. In short, the record shows
that well-managed smaller banks have nothing to fear from technology, globalization, or
deregulation.

For all size entities, however, technological change is blurring not only traditional
distinctions between the banking, securities, and insurance business, but is also having a
profound effect on historical separations between financial and nonfinancial businesses. Most
of us are aware of software companies interested in the financial services business, but some
financial firms, leveraging off their own internal skills, are also seeking to produce software
for third parties. Shipping companies' tracking software lends itself to payment services.
Manufacturers have financed their customers' purchases for a long time, but now increasingly
are using the resultant financial skills to finance noncustomers. Moreover, many nonbank
financial institutions are now profitably engaged in nonfinancial activities.

Current facts and expected future trends, in short, are creating market pressures to permit the
common ownership of financial and nonfinancial firms. In my judgment, it is quite likely that
in future years it will be close to impossible to distinguish where one type of activity ends
and another begins. Nonetheless, it seems wise to move with caution in addressing the
removal of the current legal barriers between commerce and banking, since the unrestricted
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association of banking and commerce would be a profound and surely irreversible structural
change in the American economy.

Were we fully confident of how emerging technologies would affect the evolution of our
economic and financial structure, we could presumably develop today the regulations which
would foster that evolution. But we are not, and history suggests we cannot, be confident of
how our real and financial economies will evolve. If we act too quickly, we run the risk of
locking in a set of inappropriate rules that could adversely alter the development of market
structures. Our ability to foresee accurately the future implications of technologies and
market developments in banking, as in other industries, has not been particularly impressive.
As Professor Nathan Rosenberg of Stanford University has pointed out, ". . . mistaken
forecasts of future structure litter our financial landscape."

Indeed, Professor Rosenberg suggests that even after an innovation's technical feasibility has
been clearly established, its ultimate effect on society is often highly unpredictable. He notes
at least two sources of this uncertainty. First, the range of applications for a new technology
may not be immediately apparent. For instance, Alexander Graham Bell initially viewed the
telephone as solely a business instrument--merely an enhancement of the telegraph--for use in
transmitting very specific messages, such as the terms of a contract. Indeed, he offered to sell
his telephone patent to Western Union for only $100,000, but was turned down. Similarly,
Marconi initially overlooked the radio's value as a public broadcast medium, instead
believing its principal application would be in the transmission of point-to-point messages,
such as ship-to-ship, where communication by wire was infeasible.

A second source of technological uncertainty reflects the possibility that an innovation's full
potential may be realized only after extensive improvements, or after complementary
innovations in other fields of science. According to Charles Townes, a Nobel Prize winner for
his work on the laser, the attorneys for Bell Labs initially refused, in the late 1960s, to patent
the laser because they believed it had no applications in the field of telecommunications.
Only in the 1980s, after extensive improvements in fiber optics technology, did the laser's
importance for telecommunications become apparent.

It's not hard to find examples of such uncertainties within the financial services industry. The
evolution of the over-the-counter derivatives market over the past decade has been nothing
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less than spectacular. But as the theoretical underpinnings of financial arbitrage were being
published in the academic journals in the late 1950s, few observers could have predicted how
the scholars' insights would eventually revolutionize global financial markets. Not only were
additional theoretical and empirical research necessary, but, in addition, several generations
of advances in computer and communications technologies were necessary to make these
concepts computationally practicable.

All these examples, and more, suggest that if we dramatically change the rules now about
banking and commerce, with what is great uncertainty about future synergies between
finance and nonfinance, we may well end up doing more harm than good. And, as with all
rule changes by government, we are likely to find it impossible to correct our errors
promptly, if at all. Modifications of such a fundamental structural rule as the separation of
banking and commerce accordingly should proceed at a deliberate pace in order to test the
response of markets and technological innovations to the altered rules in the years ahead.

The need for caution and humility with respect to our ability to predict the future is highly
relevant for how banking supervision should evolve. As I proposed to this audience last year,
regulators are beginning to understand that the supervision of a financial institution is, of
necessity, a continually evolving process reflecting the continually changing financial
landscape. Increasingly, supervisory techniques and requirements try to harness both the new
technologies and market incentives to improve oversight while reducing regulatory burden,
burdens that are becoming progressively obsolescent and counterproductive.

Concerns about setting a potentially inappropriate regulatory standard were an important

factor in the decision by the banking agencies several years ago not to incorporate interest
rate risk and asset concentration risk into the formal risk-based capital standards. In the end,
we became convinced that the technologies for measuring and managing interest rate risk and
concentration risk were evolving so rapidly that any regulatory standard would quickly
become outmoded or, worse, inhibit private market innovations. Largely for these reasons,
ultimately we chose to address the relationship between these risks and capital adequacy
through the supervisory process rather than through the writing of regulations.

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Technology Change Association with Agriculture

Surprisingly, the shift to an agricultural way of life was not very dependent on new
technology. Early farmers used techniques and tools which had long been familiar to hunter-
gatherers. The stone axe, hoe, sickle, milling stones were already being used as people
exploited plant materials more and more.

Profound cultural rather than technological changes were necessary at first to permit
adaptation to the new mode of life. But once the shift had occurred, ever more changes, both
cultural and technological, became possible.

To agriculturalists, survival is dependent upon getting the seeds to sprout and grow in the
soil. There task is relatively simple. Yet it involved hard work. Originally fields were cleared
of weeds and prepared for planting by hand at great effort, using primitive hoes or digging
sticks. The invention of the scratch plow in Mesopotamia about 6,000 years ago was a great
labor-saving device for early farmers. It also marked a revolutionary stage in human
development where man began a systematic substitution of other forms of energy, in this case
animal power, for human muscles.

The techniques for gathering or harvest in cereal crops, shown in a tomb painting from Egypt
remind us how precious a commodity grain was to early civilizations. Grain was dearly
bought with human sweat and diligence. Most cultures quite naturally came to associate the
main crops that sustained their existence with the substance of life itself, either worshipping
those plants or seeing them as symbols of the power of life. To a Hopi in the American
Southwest, corn (maize) is life. Corn becomes the essential element by which to not only eat
but symbolizes life itself to Hopi.

At the right, a kind of sled is being pulled by oxen over the harvested grain to separate the
hard, compact seeds from the unusable plant material of the hulls and stalks of the wheat.
Sometimes this threshing of the grain is achieved by flailing piles of grain with a club or by
treading on it. A man also seen winnowing the threshed grain by tossing it into the air with a
shovel: gravity returns the heavier grains to the pile at his feet while a breeze separates the
light chaff and blows it away.

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The efforts of labor extended beyond planting and harvesting. To live by exploiting grain
crops, humans must process the grain before it can be eaten. Human teeth, jaws, and digestive
tract are simply not adapted for this kind of diet. The typically human solution to this
problem is, however, not to evolve biologically, but to find cultural or technical solutions to
problems: in this case, to develop the knowledge and techniques for processing grain.
One early and universal technique of transforming grain into food is to mill the seeds slightly
between two stones and then to boil the grain in water, making a kind of gruel. If ground into
coarse meal, boiling in water will produce something like the oatmeal we still eat at
breakfast. If ground fine and mixed with water into a paste and then baked, the grain is
transformed into bread. The yeast cultures which leaven some forms of bread are naturally
occuring, but were regarded as magical prior to the relatively recent discovery of micro-
organisms.

If stored grain gets wet and begins to sprout, the stored carbohydrates in the seed begin
converting into sugar. While the grain is spoiled for bread-making, it can still be consumed if
treated in another process called fermentation. The sprouted grain is first baked, ground into
a paste (called malt), and then added to water. With the right yeast and little luck, the result is
beer, another of the food inventions of early Mesopotamian agriculturalists. Some
archaeologists even believe that making beer was one of the driving forces behind
domestication of wheat and barley. Large vats for storage of beer have been found in early
Sumerian cities.

Another advantage of sedentary life is the ability to use heavy and breakable--but none the
less very useful--household objects made of baked clay. Hunter- gatherers have no use for
pottery because they have to carry their possessions with them when they move.
Agriculturalists, in contrast, can accumulate such objects--and put them to multiple uses. This
discovery was made many times by human communities all over the globe, and seems to
have occurred almost as soon as they settled down in one place.

In the photo above, an Egyptian woman fashions a bowl out of rings of clay-- probably the
oldest way of making pottery. At right, an Egyptian craftsman fashions a large container
using the next level of technological development--a potter's wheel, which he moves with his
foot. Technology as basic as the potter's wheel allowed early humans to enjoy the first fruits
of mass production.
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The wheel may have first been developed--invented--for these purposes rather than for use in
vehicles. In any case, the settled mode of life led to many new discoveries out of which
elaborate technologies eventually developed.

Agricultural societies world-wide have discovered that "baking" clay in extremely hot fires
for a long period creates hard, durable objects such as the plates, jugs, and pots above. These
examples are from 'Ubaid' culture in Mesopotamia, one of the earliest pottery-making
societies.
Another step in a sequence of technological development was the modification of the pottery
kiln into a furnace capable of melting metal ores.
Note that the earliest forms of furnaces for smelting ores retain the form of the mud oven.
Over time, smelting ores became a highly refined technology and furnaces evolved into new
forms.

The discovery of techniques for turning plant and animal fibers into cloth represented a
revolutionary improvement in the quality of human life. Weaving may have preceded
agriculture, as it grew naturally out of basketry and the weaving of reed mats. Life in
sedentary agricultural villages permitted the refinement of ancient techniques and the
adoption of more complex looms.

One of the most important contributes that stemmed from the agricultural revolution was the
invention of writing. As commercial activities increased as trade became more and more
important, there was a need to record trade activities. As a result, Mesopotamians began to
use clay tokens to keep track of economic exchange values. Later, this rather cumbersome
mechanism was replaced by written symbols in clay tablets. With time, Mesopotamian
scribes began to write down everything on these clay tablets as a record of life emerged.

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