Technological change

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Technological change (TC) or technological development is the overall process of invention, innovation and diffusion of technology or processes. [1] [2] In essence, technological change covers the invention of technologies (including processes) and their commercialization or release as open source via research and development (producing emerging technologies), the continual improvement of technologies (in which they often become less expensive), and the diffusion of technologies throughout industry or society (which sometimes involves disruption and convergence). In short, technological change is based on both better and more technology.

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Modeling technological change

Obsolete "Linear Model of Innovation", of three phases of the process of technological change Linear model of innovation.svg
Obsolete "Linear Model of Innovation", of three phases of the process of technological change

In its earlier days, technological change was illustrated with the 'Linear Model of Innovation', which has now been largely discarded to be replaced with a model of technological change that involves innovation at all stages of research, development, diffusion, and use. When speaking about "modeling technological change," this often means the process of innovation. This process of continuous improvement is often modeled as a curve depicting decreasing costs over time (for instance fuel cell which have become cheaper every year). TC is also often modelled using a learning curve, ex.: Ct=C0 * Xt^-b

Technological change itself is often included in other models (e.g. climate change models) and was often taken as an exogenous factor. These days TC is more often included as an endogenous factor. This means that it is taken as something you can influence. Today, there are sectors that maintain the policy which can influence the speed and direction of technological change. For example, proponents of the Induced Technological Change hypothesis state that policymakers can steer the direction of technological advances by influencing relative factor prices and this can be demonstrated in the way climate policies impact the use of fossil fuel energy, specifically how it becomes relatively more expensive. [3] Until now, the empirical evidence about the existence of policy-induced innovation effects is still lacking and this may be attributed to a variety of reasons outside the sparsity of models (e.g. long-term policy uncertainty and exogenous drivers of (directed) innovation). [4] A related concept is the notion of Directed Technical Change with more emphasis on price induced directional rather than policy induced scale effects. [5]

Invention

The creation of something new, or a "breakthrough" technology. This is often included in the process of product development and relies on research. This can be demonstrated in the invention of the spreadsheet software. Newly invented technologies are conventionally patented.

Diffusion

Diffusion pertains to the spread of a technology through a society or industry. [6] The diffusion of a technology theory generally follows an S-shaped curve as early versions of technology are rather unsuccessful, followed by a period of successful innovation with high levels of adoption, and finally a dropping off in adoption as a technology reaches its maximum potential in a market. In the case of a personal computer, it has made way beyond homes and into business settings, such as office workstations and server machines to host websites.

Technological change as a social process

Underpinning the idea of a technological change as a social process is a general agreement on the importance of social context and communication. According to this model, technological change is seen as a social process involving producers and adopters and others (such as government) who are profoundly affected by cultural setting, political institutions, and marketing strategies.

In free market economies, the maximization of profits is a powerful driver of technological change. Generally, only those technologies that promise to maximize profits for the owners of incoming producing capital are developed and reach the market. Any technological product that fails to meet this criterion - even though they may satisfy important societal needs - are eliminated. Therefore, technological change is a social process strongly biased in favor of the financial interests of capital. There are currently no well established democratic processes, such as voting on the social or environmental desirability of a new technology prior to development and marketing, that would allow average citizens to direct the course of technological change. [7]

Elements of diffusion

Emphasis has been on four key elements of the technological change process: (1) an innovative technology (2) communicated through certain channels (3) to members of a social system (4) who adopt it over a period of time. These elements are derived from Everett M. Rogers' diffusion of innovations theory using a communications-type approach.

Innovation

Rogers proposed that there are five main attributes of innovative technologies that influence acceptance. He called these criteria ACCTO, which stands for Advantage, Compatibility, Complexity, Trialability, and Observability. Relative advantage may be economic or non-economic, and is the degree to which an innovation is seen as superior to prior innovations fulfilling the same needs. It is positively related to acceptance (e.g. the higher the relative advantage, the higher the adoption level, and vice versa). Compatibility is the degree to which an innovation appears consistent with existing values, past experiences, habits and needs to the potential adopter; a low level of compatibility will slow acceptance. Complexity is the degree to which an innovation appears difficult to understand and use; the more complex an innovation, the slower its acceptance. Trialability is the perceived degree to which an innovation may be tried on a limited basis, and is positively related to acceptance. Trialability can accelerate acceptance because small-scale testing reduces risk. Observability is the perceived degree to which results of innovating are visible to others and is positively related to acceptance.

Communication channels

Communication channels are the means by which a source conveys a message to a receiver. Information may be exchanged through two fundamentally different, yet complementary, channels of communication. Awareness is more often obtained through the mass media, while uncertainty reduction that leads to acceptance mostly results from face-to-face communication.

Social system

The social system provides a medium through which and boundaries within which, innovation is adopted. The structure of the social system affects technological change in several ways. Social norms, opinion leaders, change agents, government and the consequences of innovations are all involved. Also involved are cultural setting, nature of political institutions, laws, policies and administrative structures.

Time

Time enters into the acceptance process in many ways. The time dimension relates to the innovativeness of an individual or other adopter, which is the relative earliness or lateness with which an innovation is adopted.

Technological change can cause the production-possibility frontier to shift outward, allowing economic growth. PPF expansion.svg
Technological change can cause the production-possibility frontier to shift outward, allowing economic growth.

Economics

In economics, technological change is a change in the set of feasible production possibilities.

A technological innovation is Hicks neutral, following John Hicks (1932), if a change in technology does not change the ratio of capital's marginal product to labour's marginal product for a given capital-to-labour ratio. A technological innovation is Harrod neutral (following Roy Harrod) if the technology is labour-augmenting (i.e. helps labor); it is Solow neutral if the technology is capital-augmenting (i.e. helps capital). [2] [8]

See also

Related Research Articles

Technology assessment is a practical process of determining the value of a new or emerging technology in and of itself or against existing technologies. This is a means of assessing and rating the new technology from the time when it was first developed to the time when it is potentially accepted by the public and authorities for further use. In essence, TA could be defined as "a form of policy research that examines short- and long term consequences of the application of technology."

<span class="mw-page-title-main">Innovation</span> Practical implementation of improvements

Innovation is the practical implementation of ideas that result in the introduction of new goods or services or improvement in offering goods or services. ISO TC 279 in the standard ISO 56000:2020 defines innovation as "a new or changed entity, realizing or redistributing value". Others have different definitions; a common element in the definitions is a focus on newness, improvement, and spread of ideas or technologies.

<span class="mw-page-title-main">Appropriate technology</span> Technological movement

Appropriate technology is a movement encompassing technological choice and application that is small-scale, affordable by locals, decentralized, labor-intensive, energy-efficient, environmentally sustainable, and locally autonomous. It was originally articulated as intermediate technology by the economist Ernst Friedrich "Fritz" Schumacher in his work Small Is Beautiful. Both Schumacher and many modern-day proponents of appropriate technology also emphasize the technology as people-centered.

In business, diffusion is the process by which a new idea or new product is accepted by the market. The rate of diffusion is the speed with which the new idea spreads from one consumer to the next. Adoption is the reciprocal process as viewed from a consumer perspective rather than distributor; it is similar to diffusion except that it deals with the psychological processes an individual goes through, rather than an aggregate market process.

The concept of the innovation system stresses that the flow of technology and information among people, enterprises, and institutions is key to an innovative process. It contains the interactions between the actors needed in order to turn an idea into a process, product, or service on the market.

<span class="mw-page-title-main">Diffusion of innovations</span> Theory on how and why new ideas spread

Diffusion of innovations is a theory that seeks to explain how, why, and at what rate new ideas and technology spread. The theory was popularized by Everett Rogers in his book Diffusion of Innovations, first published in 1962. Rogers argues that diffusion is the process by which an innovation is communicated thorough certain channels over time among the participants in a social system. The origins of the diffusion of innovations theory are varied and span multiple disciplines.

Induced innovation is a microeconomic hypothesis first proposed in 1932 by John Hicks in his work The Theory of Wages. He proposed that "a change in the relative prices of the factors of production is itself a spur to invention, and to invention of a particular kind—directed to economizing the use of a factor which has become relatively expensive."

<span class="mw-page-title-main">Technology adoption life cycle</span> Sociological model

The technology adoption lifecycle is a sociological model that describes the adoption or acceptance of a new product or innovation, according to the demographic and psychological characteristics of defined adopter groups. The process of adoption over time is typically illustrated as a classical normal distribution or "bell curve". The model indicates that the first group of people to use a new product is called "innovators", followed by "early adopters". Next come the early majority and late majority, and the last group to eventually adopt a product are called "Laggards" or "phobics." For example, a phobic may only use a cloud service when it is the only remaining method of performing a required task, but the phobic may not have an in-depth technical knowledge of how to use the service.

Eco-innovation is the development of products and processes that contribute to sustainable development, applying the commercial application of knowledge to elicit direct or indirect ecological improvements. This includes a range of related ideas, from environmentally friendly technological advances to socially acceptable innovative paths towards sustainability. The field of research that seeks to explain how, why, and at what rate new "ecological" ideas and technology spread is called eco-innovation diffusion.

<span class="mw-page-title-main">Technology life cycle</span> Development, ascent, maturity, and decline of new technologies

The technology life-cycle (TLC) describes the commercial gain of a product through the expense of research and development phase, and the financial return during its "vital life". Some technologies, such as steel, paper or cement manufacturing, have a long lifespan while in other cases, such as electronic or pharmaceutical products, the lifespan may be quite short.

<span class="mw-page-title-main">Culture change</span> Term in public policy

Culture change is a term used in public policy making that emphasizes the influence of cultural capital on individual and community behavior. It has been sometimes called repositioning of culture, which means the reconstruction of the cultural concept of a society. It places stress on the social and cultural capital determinants of decision making and the manner in which these interact with other factors like the availability of information or the financial incentives facing individuals to drive behavior.

Innovation management is a combination of the management of innovation processes, and change management. It refers to product, business process, marketing and organizational innovation. Innovation management is the subject of ISO 56000 series standards being developed by ISO TC 279.

Technology Gap Theory is a model developed by M.V. Posner in 1961, which describes an advantage enjoyed by the country that introduces new goods in a market. The country will enjoy a comparative advantage as well as a temporary state of monopoly until other countries have achieved the ability to imitate the new good. Unlike the past theories which assume the market to be fixed and given, such as the Heckscher-Ohlin theory, the technology gap model addresses the technological changes. It suggests a state of economy influenced by science, politics, markets, culture and most importantly, uncertainty, which threatens the mainstream neoclassical economists as they explain economic outcomes mainly based on the natural endowment scarcity. The theory is backed up by the ideas of Joseph Schumpeter. As a result, the technology gap theory is often rejected by neoclassical economists.

The technological innovation system is a concept developed within the scientific field of innovation studies which serves to explain the nature and rate of technological change. A Technological Innovation System can be defined as ‘a dynamic network of agents interacting in a specific economic/industrial area under a particular institutional infrastructure and involved in the generation, diffusion, and utilization of technology’.

<span class="mw-page-title-main">Technology and society</span> Overview of the relationship between technology and society

Technology, society and life or technology and culture refers to the inter-dependency, co-dependence, co-influence, and co-production of technology and society upon one another. Evidence for this synergy has been found since humanity first started using simple tools. The inter-relationship has continued as modern technologies such as the printing press and computers have helped shape society. The first scientific approach to this relationship occurred with the development of tektology, the "science of organization", in early twentieth century Imperial Russia. In modern academia, the interdisciplinary study of the mutual impacts of science, technology, and society, is called science and technology studies.

Transition management is a governance approach that aims to facilitate and accelerate sustainability transitions through a participatory process of visioning, learning and experimenting. In its application, transition management seeks to bring together multiple viewpoints and multiple approaches in a 'transition arena'. Participants are invited to structure their shared problems with the current system and develop shared visions and goals which are then tested for practicality through the use of experimentation, learning and reflexivity. The model is often discussed in reference to sustainable development and the possible use of the model as a method for change.

Demand articulation is a concept developed within the scientific field of innovation studies which serves to explain learning processes about needs for new and emerging technologies. Emerging technologies are technologies in their early phase of development, which have not resulted in concrete products yet. Many characteristics of these technologies, such as the technological aspects but also the needs of users concerning the technology, have not been specified yet. Demand articulation can be defined as ‘iterative, inherently creative processes in which stakeholders try to address what they perceive as important characteristics of and attempt to unravel preferences for an emerging innovation’.

Technological transitions (TT) can best be described as a collection of theories regarding how technological innovations occur, the driving forces behind them, and how they are incorporated into society. TT draws on a number of fields, including history of science, technology studies, and evolutionary economics. Alongside the technological advancement, TT considers wider societal changes such as "user practices, regulation, industrial networks, infrastructure, and symbolic meaning or culture". Hughes refers to the 'seamless web' where physical artifacts, organizations, scientific communities, and social practices combine. A technological transition occurs when there is a major shift in these socio-technical configurations.

The sociological theory of diffusion is the study of the diffusion of innovations throughout social groups and organizations. The topic has seen rapid growth since the 1990s, reflecting curiosity about the process of social change and "fueled by interest in institutional arguments and in network and dynamic analysis." The theory uses a case study of the growth of business computing to explain different mechanisms of diffusion.

Technological determinism is a reductionist theory that assumes that a society's technology progresses by following its own internal logic of efficiency, while determining the development of the social structure and cultural values. The term is believed to have originated from Thorstein Veblen (1857–1929), an American sociologist and economist. The most radical technological determinist in the United States in the 20th century was most likely Clarence Ayres who was a follower of Thorstein Veblen and John Dewey. William Ogburn was also known for his radical technological determinism and his theory on cultural lag.

References

Notes

  1. Derived from Jaffe et al. (2002) Environmental Policy and technological Change and Schumpeter (1942) Capitalism, Socialisme and Democracy by Joost.vp on 26 August 2008
  2. 1 2 From [[The New Palgrave Dictionary of technical change" by S. Metcalfe.
      • "biased and biased technological change" by Peter L. Rousseau.
      • "skill-biased technical change" by Giovanni L. Violante.
  3. Ruttan, Vernon W. "Technology, growth, and development: an induced innovation perspective." OUP Catalogue (2000).
  4. Jaffe, Adam B., Richard G. Newell, and Robert N. Stavins. "Technological change and the environment." Handbook of environmental economics. Vol. 1. Elsevier, 2003. 461-516.
  5. Acemoglu, Daron. "Directed technical change." The Review of Economic Studies 69.4 (2002): 781–809.
  6. Lechman, Ewa (2015). ICT Diffusion in Developing Countries: Towards a New Concept of Technological Takeoff. New York: Springer. p. 30. ISBN   978-3-319-18253-7.
  7. Huesemann, Michael H., and Joyce A. Huesemann (2011). Technofix: Why Technology Won’t Save Us or the Environment, Chapter 11, "Profit Motive: The Main Driver of Technological Development", New Society Publishers, Gabriola Island, Canada, ISBN   0865717044
  8. J. R. Hicks (1932, 2nd ed., 1963). The Theory of Wages , Ch. VI, Appendix, and Section III. Macmillan.

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