Technological change leads to innovations in both processes and products. The first may involve changes in production processes, the materials used, or the organization of firms. The second creates new goods and services, often at the expense of existing products but usually to the benefit of the consumer through increased choice and quality. The rate of both forms of innovation is increasing

Manufacturing firms, which introduce new and improved products or processes, experience faster sales growth and higher profits than those, which do not. The introduction of product and process innovation often allows firms to command a quality premium in the markets and hence makes them less vulnerable to competition based on price.

Higher levels of technological sophistication are also a source of strength for an economy as a whole. Economies orientated towards technology sectors were less likely to experience recession. Technological advance also renders the physical location of production less important as it tends to reduce the physical mass of output and therefore the level of transport costs: an important consideration from north central Florida's perspective. In addition, developments in information and communications technologies have allowed information, which can be described as 'weightless', to become an increasingly traded commodity and one which, in many instances, is not constrained in its production by physical location.

Technological development, combined with globalization, has led in advanced economies, to a decline in the demand for unskilled and low skilled labor and a rise in the demand for employees with higher skills and greater flexibility. This shift in labor demand tends to operate to the detriment of older, and frequently, male employees and to the benefit of younger, better educated and, increasingly, female workers. It highlights the importance for our region of ensuring that the skills of the entire workforce are constantly upgraded and working practices become sufficiently flexible to meet changing demands.