Paper
Towards a more historical approach to technological change
Published Sep 1, 1997 · Gavin Wright
The Economic Journal
120
Citations
1
Influential Citations
Abstract
An economic historian does not get far in trying to interpret the comparative performance of national economies, without confronting issues surrounding the conceptualisation and measurement of technology. Thus I have found myself in recent years wrestling with the historical phenomenon known as 'American technological leadership', and this research experience has generated some views on more general matters. Vernon Ruttan's assessment of the current state of the field is relatively unfavourable. In his view, promising theoretical beginnings such as 'induced innovation' and 'path dependence' have not been successfully integrated with each other, nor with a programme of empirical research; approaches to 'endogenous growth' have not yet confronted the research and development process in all its richness and micro-level detail. This critique has much validity with respect to the more abstract literature cited, but I would point, in contrast, to a number of promising recent efforts to transmute theoretical concepts into operational research agendas and empirical projects. As laid out most clearly by Arrow (i 962), investment in research for the purpose of generating new technology differs in two fundamental ways from conventional investment: appropriability and uncertainty. Broadly speaking, those economic sectors that exhibit high rates of technological progress over extended periods are those that have 'solved' these two problems in one way or another. In the United States just five industries have accounted for more than 7500 of all industrial R & D spending in the postwar period: aircraft, electrical machinery, non-electrical machinery, chemicals and allied products, and motor vehicles (Rosenberg, I992, pp. 66-9). But the specific institutional structures that have mitigated problems of appropriability and risk have varied widely: private market power, government procurement programmes, legal protection for intellectual property, cooperative and non-profit research arrangements, and diversified risk portfolios have all been important in one or another instance, but one would not expect to find many stable empirical regularities with respect to any subset of these variables. One of the implications of this perspective is that it is difficult both in practice and in principle to maintain a clear distinction between innovations in pure 'technology' on the one hand, and adoptions or diffusion of alreadyexisting technologies on the other. Romer (I996) argues that the most basic distinction among productive inputs is between 'ideas' and 'things', the first being non-rival (though sometimes imperfectly excludable) in use, the latter
American technological leadership is a result of a combination of institutional structures and appropriability and risk mitigation, highlighting the complexity of distinguishing between pure 'technology' innovations and adoptions of existing technologies.
Full text analysis coming soon...