The question of measurement of technology has so far been treated
mainly on the micro-economic level by engineers . A very
sophisticated treatment is due to Devendra Sahal ( Sahal 198 )
who deals with the development of the locomotive. The engineering
studies suggest surprising continuities and regularities of the
learning process, but the economists are still far from being able
to integrate this into their own concepts or experience.
4. Technology and Economic Structure.
For the greatest part technical progress proceeds in very small
steps (Sahal).It is a process of learning which by its nature
requires time and consists of gradual advance. In the course of
this continuous development there occurs,however, from time to
time a major advance, a jump as it were. This is normally embodied
in a new type of equipment. This discontinuous change or
"innovation” is the resulting sum of a large number of preceding
steps which lead up to it. Equally, after the first pioneer has
built the new equipment there is a long series of improvements,a
process of learning to use the equipment, and a follow up process
of gradual improvements in the product or in the process or in
both. It should be noted that the discontinuity in the process of
technical advance has not only a scientific-technical but also an
economic-social and institutional side.The novelty meets the
resistence of established institutions;it it happens to overcome
them it will be more or less disruptive. In fact the discontinuity
is perhaps more important in society than in the development of
technical knowledge itself.
Since long run growth practically always involves technical change
and occasional discontinuous jerks it will always involve
structural change. This is a pretty large subject and I mention it
here only to introduce certain amendments to my treatment of it in
Maturity and Stagnation.In this book technical change was
exemplified by the case of an industry in which innovation is
introduced by one firm and subsequently spreads to the other firms
in the industry, leading eventually to the elimination of some
firms which are too slow to adapt and for whom there is no more
room in view of the growth of the innovating firm’s capacity.
This analysis, restricted to the pattern of change in a single
industry,applies primarily to process innovations;it can be
adapted to the case of a new product which is not so radically
different that it involves the establishment of an altogether new
industry.lt does not cover, however, the case of a radically new
product which is produced by an entirely new and different
industry and is not in very direct competition with the
established products or services of other industries. In an
indirect way it may sooner or later affect some of the other
industries ( television versus cinema ), it may in some cases even
lead to the disappearance of an old industry, but the function of
competition in such a new industry will be taken over for the
greater part by new entrants which follow on the heel of the
innovator,who contribute to the gradual improvement and cheapening
of the new product and who bring about in good time the lowering