Learning-by-doing is a
concept
Concepts are defined as abstract ideas. They are understood to be the fundamental building blocks of the concept behind principles, thoughts and beliefs.
They play an important role in all aspects of cognition. As such, concepts are studied by ...
in
economic theory
Economics () is the social science that studies the production, distribution, and consumption of goods and services.
Economics focuses on the behaviour and interactions of economic agents and how economies work. Microeconomics analyze ...
by which
productivity
Productivity is the efficiency of production of goods or services expressed by some measure. Measurements of productivity are often expressed as a ratio of an aggregate output to a single input or an aggregate input used in a production proces ...
is achieved through practice, self-perfection and minor
innovation
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 enti ...
s. An example is a factory that increases output by learning how to use equipment better without adding workers or investing significant amounts of capital.
The concept of learning-by-doing has been used by
Kenneth Arrow
Kenneth Joseph Arrow (23 August 1921 – 21 February 2017) was an American economist, mathematician, writer, and political theorist. He was the joint winner of the Nobel Memorial Prize in Economic Sciences with John Hicks in 1972.
In economi ...
in his design of
endogenous growth theory
Endogenous growth theory holds that economic growth is primarily the result of endogenous and not external forces. Endogenous growth theory holds that investment in human capital, innovation, and knowledge are significant contributors to economi ...
to explain effects of innovation and technical change.
Robert Lucas, Jr.
Robert Emerson Lucas Jr. (born September 15, 1937) is an American economist at the University of Chicago, where he is currently the John Dewey Distinguished Service Professor Emeritus in Economics and the College. Widely regarded as the central ...
(1988) adopted the concept to explain increasing returns to embodied human capital. Yang and Borland (1991) have shown learning-by-doing plays a role in the evolution of countries to greater specialisation in production. In both these cases, learning-by-doing and increasing returns provide an engine for long run growth.
Recently, it has become a popular explaining concept in the
evolutionary economics and
resource-based view (RBV) of the
firm
A company, abbreviated as co., is a legal entity representing an association of people, whether natural, legal or a mixture of both, with a specific objective. Company members share a common purpose and unite to achieve specific, declared ...
.
The
Toyota Production System
The Toyota Production System (TPS) is an integrated socio-technical system, developed by Toyota, that comprises its management philosophy and practices. The TPS is a management system that organizes manufacturing and logistics for the automobile ...
is known for
Kaizen
is concept referring to business activities that continuously improve all functions and involve all employees from the CEO to the assembly line workers. ''Kaizen'' also applies to processes, such as purchasing and logistics, that cross orga ...
, that is explicitly built upon learning-by-doing effects.
See also
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References
{{reflist
Production economics
Economic growth