Technological change

Technological change (TC) or technological development, is the overall process of invention, innovation and diffusion of technology or processes. 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 process|continual improvement]] of technologies (in which they often become less expensive), and the diffusion of technologies throughout industry or society (which sometimes involves [[disruptive innovation|disruption]] and [[technological convergence|convergence]]). In short, technological change is based on both better and more technology.
[[File:Technological Change.jpg|750px|thumb|center|Original model of three phases of the process of Technological Change]]
Modeling 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. 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 innovations|diffusion]] of a technology theory generally follows an [[Logistic function|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 [[workstation]]s and [[server (computing)|server machines]] to host [[website]]s.
For mathematical treatment of diffusion see: [[Logistic function]]
For examples of diffusion of technologies see: [[Diffusion of innovations#International Institute for Applied Systems Analysis (IIASA)]]
For assorted [[diffusion curve]]s such as appliances, household electrification and communications see: [[Diffusion of innovations#Diffusion data]]
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. Marketing industrial machines is a major source of technological diffusion in economies. That is because machines are such important producer goods. Technological development in industry typically consists of firms installing new equipment they have bought or hired from outside suppliers. 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]] [[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.
[[File:PPF expansion.svg|thumb|right|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 set|production possibilities]].
A technological [[innovation]] is [[Hicks-neutral technical change|Hicks neutral]], following [[John Hicks]] (1932), if a change in technology does not change the ratio of [[Capital (economics)|capital]]'s [[marginal product]] to [[labour (economics)|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 [[Robert Solow|Solow neutral]] if the technology is capital-augmenting (i.e. helps capital).
External links.
[[Category:Technological change| ]]
[[Category:Innovation]]
[[Category:Engineering studies]]