Social Economic And Legal Framework Report

Running head: SOCIAL ECONOMIC AND LEGAL FRAMEWORK
Social Economic and Legal Framework
Name of the Student
Name of the University
Author Note

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Table of Content
1. Introduction............................................................................................................................3
2. Literature Review on knowledge economy and various drivers of economic change...........5
Concept of knowledge Economy...........................................................................................5
Macro- economic dimensions of business.............................................................................6
Demographic and socio-economic shifts.............................................................................12
Technological drivers of change..........................................................................................15
3. Impact of legal framework and political factor....................................................................17
Role of political factors in the economic development and its implication on Tesla..........17
Implications of ‘sharing economy’ for Tesla.......................................................................18
Formal and informal legal systems and anti-trust laws and social economy development. 19
4. Conclusion and Recommendation........................................................................................19
Recommendation..................................................................................................................20
References................................................................................................................................22

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Executive summary
This research report provides a detailed analysis of socio economic and legal framework
creating colossal impact on business today. It is essentially important to learn how technology
disruption is actually affecting the socio-economic and legal environment across globe. To
analyse this growing impact of disruptive technology on socio-economic and legal
environment, Tesla Motor’s disruptive technologyhas been analysed in the report. The
findings indicate that Although Tesla with its disruptive business model is going to penetrate
the market with its electronic car models, Tesla may observe that Technology-driven trends
are most likely to revolutionise how the big players in the sector respond to changing
customer behaviour, build partnership as well as drive transformational change. Tesla faces
the challenges of shared economy services in the car manufacturing sector. The industry
might observe enormous skills gap in relation to AI and Machine language. Tesla, besides its
automated business model development, should focus on the skills development programs for
the employees.

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1. Introduction
This research report presents a detailed analysis of socio economic and legal
framework which creates significant impact on businesses today. It has been identified that
business environment is highly dynamic in nature and technology has been the major driver
in market dynamics. Undoubtedly, technology advances have significantly changed the
business environment across the globe because every business today incorporates technology
in its operation, product and all other aspects of the business. As the rate of technology
adoption in business is rapidly increasing, there is an emerging shift in socio economic and
legal environment associated with the business. Rapid growth in technology emerges as
technology disruption which is actually changing the shape of socio economic and legal
framework.
Consequently, business practices in contemporary market place are following new
pattern. According to Pandit, et al. (2018), disruptive technology is most likely to play a
great role in enhancing the quality of life of people, global economies and business model of
the organizations. It has also been identified that a disruptive technology which also changes
the product that once was generally expensive as well as complicated but now with the
disruptive technology, production of resources is quite easy and affordable. In this context,
Gao et al. (2016), commented that at a point when the innovation that has the potential to
change the growth of the industry, longstanding organizations mostly consider it to be
unattractive and it is not something which the customers need. It is also estimated that profit
margin are not adequate to address the enormous technology expense.
Subsequently, the emerging innovation is often overlooked. Another business after
sometime, manages to go with innovation in the market place. This means once disruptive
innovation grows, even the small scale innovation growingly raise technology performance

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on the elements of mainstream consumers. Therefore, it is essentially important to learn how
technology disruption is actually affecting the socio-economic and legal environment across
globe. Thus, to analyse this growing impact of disruptive technology on socio-economic and
legal environment, real world business scenario has been considered in the analysis. The
analysis has been performed on Tesla Motor’s disruptive technology.
Tesla Motor:
It has been identified that Tesla is one such brand in the car manufacturing sector that
takes the quest for next-level technology as well as sustainability to another level.
Throughout the disruptive innovation, it has been identified that Tesla’s automotive start-up
is mostly having a good year and in September, the organization expects to start shipping its
all electronic Model 3 to non-employee consumers, who, by now logged 500,000 pre-orders
(Chen and Perez 2018). The report published in 2019 indicates the fact that even though there
is a growing success in Tesla’s model, its stocked is jumped taking the 14 years of old start-
up’s valuation to over $53 billion, which is steps ahead of other US car manufacturer.
However, despite such rocket-growth, Tesla alone lost nearly two billion dollars in the past
two years. Nonetheless, Van den Steen (2015) commented that even though there have been
some financial loss, in the field of disruption, the organization Tesla by stepping in the high
end market as a sustaining innovation is most likely to face powerful, established incumbents
like BMW and Mercedes. In this context, Eggers and Eggers (2011) commented that Tesla is
actually approaching the market with its resources process and profit formula by developing a
hybrid model. Thus, it can be mentioned that quest for being disruptive is uninterrupted in
Tesla’s journey.
As put forward by Mangram (2012), socio-economic trends have high impact on Tesla’s
business model because increasing price of fossil fuels and affordability rate of people enable

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Tesla to come up with the idea of incorporating disruptive technology. It is noted that since
the launch of smart-phone, it is quite certain that customers are most likely to adapt to
complex and expensive technology if the technology is able to make their lives easier than
before. In business, it is mostly treated as user value convenience and ease. It is noted that
such core values bought up the technology-based cultural items of 21st century. So, it can be
mentioned that businesses today often translate such priorities into future technology and
need of the society. It is worth mentioning that Tesla in the Automotive sector leverage the
opportunity for core restructuring. The large tech giant like Tesla not only consider product
purchaser when developing strategies and business model, it should take users and groups
into account as they are affected by commotion issues. Phute (2016) mentioned it has been
decades long automobile sector shifted attention from conventional technical agenda to social
commodity. It is worth stating that social participation, landscape and cities are shaped by
such personal mobility. In this context, Oltra and Saint Jean (2009) young as well as
technically savvy generation played the major role in transforming the automotive sector to a
greater extent. Thus, Tesla’s popularity lies in the fact that the organisation mostly focus on
the use of utility of the vehicles rather than the mass production in order to make people’s
live easer. It can he also mentioned that Tesla’s business model will incorporate
unprecedented change with respect to far reaching effect it might have on the industry. It is
also noted that in spite of falling inventory, vehicles sales may invariably increase. It is also
noted that Tesla in the automotive industry is most likely to start to invest less in product
range.