On Technological Progress As Problem Solving

One of the problems associated with the study of technological change at the macro-scale arises from the fact that it is inherently a result of many different search processes that occur in response to problems and challenges that appear only at the micro-scale. More often than not, the successful innovations are attributable to individuals or very small groups responding to very specific problems. A few historical examples may convey the idea.

One of the most interesting historical examples was the deliberate search for a technique to determine longitudes accurately at sea. Latitude could be determined quite accurately from astronomical observations, but longitude was much more difficult to ascertain because it required very precise timekeepers. The method of longitude determination by chronometer was known (and published) as early as 1530. Christian Huygens was the first to attempt to build such a timepiece (1662-79), but the necessary accuracy in metal-cutting was not achievable at that time. As a response to a naval disaster in 1714 in which several warships were driven aground in the Scilly Isles (off Cornwall) and hundreds of sailors died, the British Parliament offered a large reward (£20,000) for any practical solution to the problem. The final solution (until satellites came along) required very accurate timekeeping by some method that did not rely on a pendulum (the pendulum is only reliable on a very stable base). A chronometer with the necessary accuracy was finally achieved by a carpenter and self-taught inventor, John Harrison.14

Other more recent examples include the search for better sources of illumination, starting with oil lamps and candles, followed by gaslight, the incandescent lamp, fluorescent lights and finally the light-emitting diodes (LED); the search for better methods of refining iron and making steel that culminated in the basic oxygen process (BOP); and the long search for a practical method of 'fixing' atmospheric nitrogen, which culminated in 1913 with the successful Haber-Bosch process for ammonia synthesis. The main point here is that such searches are triggered by needs and/or barriers, but they are not explained by human curiosity. Nor are they random events. In fact, radical innovations in technology or business practices are not explained either by learning or adjustment.

In recent times, the problems, and the solutions, have become progressively more complex. Breakthroughs increasingly result from a deliberate, wide-ranging, and usually costly, search process prompted by a 'barrier' of some sort. When the barrier has been overcome by a 'breakthrough', the subsequent search process is much more narrowly focused and, typically, much more productive (at first) than the search process which led to the breakthrough itself. This topic is explored in more detail in Chapter 2.

Some conceptual and terminological distinctions are needed to facilitate the discussion that follows. Gradual changes at the product or process level, within a sector, are sometimes characterized as 'Usherian', in honor of the historian of technology who (properly) emphasized their cumulative importance (Usher 1929). The more radical innovations are sometimes characterized as 'Schumpeterian' for a similar reason (Ruttan 1959; Schumpeter 1912). The difference between them is crucial, because only radical Schumpeterian innovations (in general) result in structural change to the economy. We argue subsequently that Schumpeterian innovations are, by far, the dominant creators of new technologies and new products or services that, in turn, induce new demands and new sectors. It is the creation of new products and services that drives economic growth, even though gradual incremental (Usherian) improvement processes dominate the short and intermediate time frames. Unfortunately much of the economic literature fails to distinguish clearly between the two kinds of innovation.

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