9 ocw -innovation processes
TRANSCRIPT
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January 8, 2010
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Innovation ProcessesSociety and Economics
Karel Mulder
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January 8, 2010 2
Technology and SocietyProof of Autonomous Technology?
Moores Law
The original Mooreslaw plot
Electronics, April 1965
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January 8, 2010 3
Technology and SocietyProof of Autonomous Technology?
http://www.physics.udel.edu/~watson/scen103/intel-new.gif
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January 8, 2010 4
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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Technology and SocietySocial Constructivism - Development of the Bicycle
1861
Michaux
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Technology and SocietySocial Constructivism - Development of the Bicycle
1874Ariel
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Technology and SocietySocial Constructivism - Development of the Bicycle
from 1879Safety bicycles
1885 Rover Safety Bicycle http://www.phys.uri.edu/~tony/bicycle/rover.gif
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Technology and SocietySocial Constructivism - Development of the Bicycle
1890sOrdinary
http://upload.wikimedia.org/wikipedia/commons/thumb/a/a7/Ordinary_bicycle01.jpg/180px-Ordinary_bicycle01.jpg
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Technology and SocietySocial Constructivism - Development of the Bicycle
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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Technology and SocietySocial Constructivism - Development of the Bicycle
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
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Technology
and Society
Social Constructivism -Development of theBicycle
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Technology and SocietySocial Constructivism - Development of the Bicycle
https://reader010.{domain}/reader010/html5/0606/5b179e9ab1ced/5b179ea4c
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Technology and SocietySocial Constructivism - Development of the Bicycle
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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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Economic and Technological Change
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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January 8, 2010 33
Economic and Technological ChangeEvolutionary Theory of Technological Change
variation/selection
Biological metaphor:
random variation based existing technology,
(market) selection,
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Economic and Technological ChangeEvolutionary Theory of Technological Change
Variation guided by:
Dominant concepts (Kuhn)
Exemplar
Experiences of the past
Future expectations
Adjacent technologies
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Economic and Technological ChangeEvolutionary Theory of Technological Change
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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Economic and Technological Change
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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Economic and Technological Change
Mechanisms, behind trajectories:
Positive Feedback
Arthur, 1988
Entrenchment
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Economic and Technological Change
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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Economic and Technological Change
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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Economic and Technological Change
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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Economic and Technological Change
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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Economic and Technological Change
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