9 OCW -Innovation Processes

8/10/2019 9 OCW -Innovation Processes

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January 8, 2010

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Innovation ProcessesSociety and Economics

Karel Mulder


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Technology and SocietyProof of Autonomous Technology?

Moores Law

The original Mooreslaw plot

Electronics, April 1965


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Technology and SocietyProof of Autonomous Technology?

http://www.physics.udel.edu/~watson/scen103/intel-new.gif


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Technology and SocietyAn Alternate Vision: Social Constructivism

Various social groups are involved with technology

Every group has a specific view of a certain technologyExample: PC.

secretary: type writer

book keeper: administration tool at home: communication tool

Technologies are shaped by demand / influence of relevant social

groups


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Technology and SocietySCOT-model: Social Construction of Technology

Artifact

Relevant social groups

Interpretative flexibility

Inclusion of new groups

Technological frame


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Technology and SocietySCOT-model: Social Construction of Technology

ArtifactSocialgroup

Socialgroup

Socialgroup

Social

group

Socialgroup

SocialGroup

Problem

Problem

Problem

Problem

Problem

Problem

Solution

Solution

SolutionSolution

Solution


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Technology and SocietyAn Alternate Vision: Social ConstructivismExample: Development of the Bicycle

1818Draisienne

Two-wheeled

rider-propelledmachine


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Technology and SocietySocial Constructivism - Development of the Bicycle

Boneshaker

Penny

Farthing

LawsonsBicyclette

Macmillansbicycle

Guilmetsbicycle

GearedFacile

ClubSafety

Star

Extraordinary


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1861

Michaux


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1874Ariel


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from 1879Safety bicycles

1885 Rover Safety Bicycle http://www.phys.uri.edu/~tony/bicycle/rover.gif


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1890sOrdinary

http://upload.wikimedia.org/wikipedia/commons/thumb/a/a7/Ordinary_bicycle01.jpg/180px-Ordinary_bicycle01.jpg
http://upload.wikimedia.org/wikipedia/commons/a/a7/Ordinary_bicycle01.jpg


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Penny farthing, up to 1.5 m

Line of development guided by aspeed wish sustained by young,sportive men for whom the danger

of falling was part of the fun1893 High wheeler

http://www.bikes.msu.edu/history/web/hi-wheeler-1-P3019443.JPG


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Safety bike

Reflectors for night riding

Women, recreation cyclists, older peoplewere all interested in the developmentof a safe and comfortable bike (withbrakes, rear wheel drive, pneumatic tiresetc.)

Ultimately, interpretative flexibility

declined: one (safety) bike, used by allactors, the old and the (included) newactors ht

tp://e

n.w

ikipedia.o

rg

/wiki/Image:Bicycle.j

pg
http://upload.wikimedia.org/wikipedia/en/d/d3/Bicycle.jpg


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Technology

and Society

Social Constructivism -Development of theBicycle


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https://reader010.{domain}/reader010/html5/0606/5b179e9ab1ced/5b179ea4c


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Technology and SocietyConclusion

Technology is (in part) shaped by social forces, these forces might

not reflect our feeling of justice

Complexity of innovation creates unforeseen outcomes

Results that have negative effects for third parties


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Economic and Technological Change


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Economic and Technological ChangeEconomic Determinism

Technology is to design the most efficient solution

to fulfill a need

Problems:

Time scale of judgment/technological change?

Innovations: Need only exists after the innovationNeed can be manipulated

New technology is often not most efficient

Availability of innovative resources (knowledge, etc) important?


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Economic and Technological ChangeCreating economic growth

Needed:

Growth labor

Growth capital

Quality of labor

Rest: innovation, residue method


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Economic and Technological ChangeMarket failure: Role of Governments?

Appropriation is never total

International competition (level playing field) (semi-) public sector, monopolies

Long term research

Diffused sector (agriculture)

Moral reasons (health care)

Risk of non compliance (health care)

Public good (defence, justice)

Costs externalized, profits internalized


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Business cycles

Period 8-9 years

Kondratieff waves

40-50 years

Cluster of innovations that transforms society


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Economic and Technological ChangeExamples

Cotton, iron, steam 1790-1840

Railroads 1840-1890

Electricity, cars, steel 1890-1940

Chemistry, electronics 1940-1980

Information, comm. 1980-Blcher, an early railwaylocomotive built in 1814 by

George Stephenson.http://www.answers.com/topic/railway


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capital

amount Q

work done

Economic and Technological ChangeProduction Function


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Economic and Technological ChangeProduction Function

Explains substitution labor, capital, resources

Explains development of different economies

Limited to on the shelf (process) technology


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Economic and Technological Change1940, Schumpeter

Technology is endogenous to economy:

Companies might invest more in their researchand thereby achieve higher profits

Example Du Pont: innovation as part ofeconomic strategy

What drives technology?

Market demand or technology push

Background: is Basic Research or AppliedResearch to be stimulated?

http://en.wikipedia.org/wiki/Image:1schumpeter.jpg


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Economic and Technological ChangeTechnology Push vs. Market Pull

Technology push vs Market pull

as determinants of technological change

Technology Push:

Stirling Motor, Tracy Kidder: The soul of a new machine, DSM lysine

Market Pull:

Replacement for silk, indigo dye, continuous catalitic cracking


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Economic and Technological ChangeSchmookler:

Patents are filed after the introduction of new products

Research follows a need discovered by an individual

Project Hindsight etc


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Economic and Technological ChangePush vs. Pull undecided

Problem:

What is need?

Initial stages push, later pull?

Both important:

market is crucial, but a pushing project champion too


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Economic and Technological ChangeEvolutionary Theory of Technological Change

variation/selection

Biological metaphor:

random variation based existing technology,

(market) selection,


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Variation guided by:

Dominant concepts (Kuhn)

Exemplar

Experiences of the past

Future expectations

Adjacent technologies


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Selection guided by:

Cost/performance

Expectations

Regulation

Interconnection to other technologies

Demographic & cultural change


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Economic and Technological ChangeTechnological trajectories

Guided by:

Technological regime,Paradigm

Cultural matrix

Methods, equipment, heuristics (rules that guide new

developments), examplars, education

Examples:

DC 3, but also application of aluminium in aircrafts


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Economic and Technological ChangeWhat is wrong with the biologic comparison ?

Lamarck, purposeful change?

Coupling between variation and selection:Steering of selection environment

Anticipating changes in selection environment

Quasi evolutionary model


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Quasi Evolutionary Model

Nexus: a link between variation and selection

advertizing, standardization etc influ-selectionmarketing, insurance, etc influ-variation

Niche: a separate (protected) part of the selection environment


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Mechanisms, behind trajectories:

Positive Feedback

Arthur, 1988

Entrenchment


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e.g. Video Recorder

3 systems:

VHS (JVC/Matsushita),Betamax (Sony)

Video2000 (Philips-Grundig)

Until 1974 no recording for ordinaryconsumers

Sony Beta Max Tapehttp://en.wikipedia.org

/wiki/Image:Beta_Max_Tape.jpg


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e.g. Video Recorder

1974 Sony offers JVC licence for Betamax

1975 Sony has monopoly: 30.000 video recorders sold in USA

1976 VHS (JVC) en V2000 (Philips) introduced on market

1977 Sony - Zenith, JVC - RCA

RCA pushes more recording length

VHS reaches 3 hrsBetamax-Philips only 1 hr


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e.g. Video Recorder

Market experts expect 3 standards like record player (33, 45, 78)

Disney and Universal lose legal battle against video recording andstart selling/renting movies on video

1978 Betamax market share only 19 %, VHS 36 %

Price war, video recorders become 3-4 times cheaperLots of pornography

10-1-1988 Sony starts production of VHS

Philips had done so beforeVHS is standard,

betamax only 1 % market share in USA, V2000 0%

i d h l i l h


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Mechanisms behind positive feed back

Expectations (based on reputation)

Economies of scaleHardware software connections

Marketing & logistics

Learning curve

E i d T h l i l Ch


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Regime Shifts Possible?

Factors

Belief in progress of current regime is low (Tenax)Availability of accumulated knowledge and experience for a newalternative

Presence of niche markets

Scope for considerable learning effects

Network creation

9 OCW -Innovation Processes

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