Many parents cannot conceive of life without a stroller, a car seat as a baby carrier, or both. Many pediatricians recommend that newborns and infants lay flat on their backs in a stroller and not be carried, in order to avoid pressure on their underdeveloped bodies. However, laying an infant on her back in a stroller is actually more physically and emotionally stressful. It can also inhibit some types of physical development. Being carried or worn (in a baby sling, etc.) with proper support is not only developmentally sound but often preferable for both the baby and the mother. Upright carrying optimizes the physical, emotional, and intellectual growth of your baby.
The human spine is not perfectly straight, though it might seem that way from the front or the back. When viewed from the side, the spine is shown to have four slight curves, resulting in an elongated "S" shape. These curves help us to maintain flexibility and balance, as well as absorb the physical stress placed on our body and our spine throughout the day.
We are not born with these curves, though. They develop gradually as a result of our body responding and adapting to gravity. At birth, babies are in a state of flexion, meaning that their spines form a natural long c-shaped (convex) curve, indicated by the red line in the picture below.
Initially, a baby doesn't have the strength or the balancing spinal curves necessary to hold up his head. But as his neck muscles get stronger, he will begin to lift his head against gravity and a curve will start to develop in his neck (the cervical curve) to help balance his head.
When an infant is held upright, however, she is able to practice various compensatory movements, enhancing muscular strength and allowing fro more control over her gross and fine motor skills. When the mother walks, stops, or turns, the infant's body naturally works against the pull of gravity to maintain her upright position.
If this is the case, why do some still insist that the horizontal position is so much better for your infant, in spite of all of the evidence to the contrary? This assumption might stem from their acquaintance with the upright carriers of the 80's and 90's, with their typical lack of head/neck support, tight or chafing leg holes, and have no leg support, resembling a parachute harness more than a device for carrying a tender newborn. Perhaps they have seen so many babies facing outwards when carried upright that they assume all carriers are non-supportive. Such carriers do not provide the proper leg support, and can cause the pelvis to tilt backwards and place them in the dangerous "hollow back" (concave) position indicated by the red line in the image below.
How, then, should you carry your infant? When an infant is carried, he should be oriented toward his mother. Ideally, the fabric of the baby carrier should extend to the back of his knee (or have footstraps), which appropriately positions the pelvis and spine. Upright baby carriers that support the legs, carrying a baby as a mother naturally would in arms, does not compromise a baby's spine or hips. A mother, using either her arms or a simple piece of cloth, supports her baby's legs in a flexed (with the knees bent) abducted (legs spread apart) position supporting the hip and spine. Instead of fabric at the crotch (which contributes no leg support) or swaddling the legs (which is too restrictive), ergonomic carriers put the baby in the position that supports his legs the way his mother's arms would. This is the position that infants are hardwired to assume when they are picked up.
Information taken from: http://www.bobafamily.com/research/strollers-baby-carriers-and-infant-stress/