Technological change (TC) or technological development is the overall process of

invention An invention is a unique or novel device, method, composition, idea or process. An invention may be an improvement upon a machine, product, or process for increasing efficiency or lowering cost. It may also be an entirely new concept. If an i ...

, innovation and diffusion of technology or

processes A process is a series or set of activities that interact to produce a result; it may occur once-only or be recurrent or periodic. Things called a process include: Business and management *Business process, activities that produce a specific se ...

.From ''The New Palgrave Dictionary o
technical change
by S. Metcalfe.
•
biased and biased technological change
by Peter L. Rousseau.
•
skill-biased technical change
by Giovanni L. Violante. In essence, technological change covers the

of technologies (including processes) and their commercialization or release as open source via research and development (producing emerging technologies), the continual improvement process, 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.

Modeling technological change

In its earlier days, technological change was illustrated with the '

Linear Model of Innovation The Linear Model of Innovation was an early model designed to understand the relationship of science and technology that begins with basic research that flows into applied research, development and diffusion It posits scientific research as the ...

', 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 A fuel cell is an electrochemical cell that converts the chemical energy of a fuel (often hydrogen) and an oxidizing agent (often oxygen) into electricity through a pair of redox reactions. Fuel cells are different from most batteries in requ ...

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. 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). A related concept is the notion of Directed Technical Change with more emphasis on price induced directional rather than policy induced scale effects.

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. 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.

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 Everett M. "Ev" Rogers (March 6, 1931 – October 21, 2004) was an American communication theorist and sociologist, who originated the ''diffusion of innovations'' theory and introduced the term ''early adopter''. He was distinguished professor em ...

' 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. PPF expansion

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 Capital may refer to: Common uses * Capital city, a municipality of primary status ** List of national capital cities * Capital letter, an upper-case letter Economics and social sciences * Capital (economics), the durable produced goods used f ...

's marginal product to labour's marginal product for a given capital-to-labour ratio. A technological innovation is

Harrod neutral Technological change (TC) or technological development is the overall process of invention, innovation and diffusion of technology or processes.From ''The New Palgrave Dictionary otechnical change by S. Metcalfe. •biased and biased techn ...

(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).

J. R. Hicks Sir John Richards Hicks (8 April 1904 – 20 May 1989) was a British economist. He is considered one of the most important and influential economists of the twentieth century. The most familiar of his many contributions in the field of economic ...

(1932, 2nd ed., 1963). '' The Theory of Wages'', Ch. VI, Appendix, and Section III. Macmillan.

References

Notes

External links

* {{DEFAULTSORT:Technological Change Innovation Engineering studies