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Technology
The Engine of Change
Technology is a facilitating or enabling agentThe geography of technology change and knowledge exhibits both concentration and disperalTechnology change is a form of learning
Types of technological change
Incremental innovationsRadical innovationsChanges in the technology system
Impact on several existing parts of the economyChanges in the techno-economic paradigm
Large-scale revolutionary change
Short-term business cycles of growth and stagnation or recession occur in even the wealthiest countries. Growth and stagnation, or even decline, are considered to have a regular periodicity that is not too different from a circadian rhythm or generational reproduction.
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some emphasis has been placed on the analysis of long-term cycles of economic upswing and downswing called Kondratieff waves. These long economic waves are named for the Russian economist who either discovered or invented them, depending upon one's point of view.
The waves supposedly can be found at both the global and national scales of analysis. They last about 50 years and are divided in half, with an initial period of strong growth, or upswing, followed by stagnation or downswing.
validation of the long-wave hypothesis is hampered in 2 ways.1) empirical evidence of the existence of long waves has been developed on a data base that is quite thin. Reasonably accurate measures of national income and industrial production simply are not available for measuring the earlier waves, especially at the global scale.
first Kondratieff wave lasted from 1790 to 1849. Basic innovations during the period affected machine tools and steam engines.second Kondratieff began in 1849 and ended in 1894. The dominant innovations during the second wave were in railroads and iron and steel production.
third Kondratieff, from 1894 to 1938, was a period of technological innovations in electrical engineering, chemicals, communications, and automotive transportation.fourth Kondratieff began in 1938 and is just coming to an end. This Kondratieff has been driven by innovations in plastics, communications, and electronics.
2) theoretical basis for the existence of Kondratieff waves is weak, and nonexistent for their regular periodicity.Monetary and financial contexts have been examined as theoretical bases for Kondratieff waves, but their existence is most frequently attributed, to waves of technological innovation.
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Schumpeter suggested long waves of economic development are based on the diffusion of major technologies
Five successive technological revolutions in 230 years
Each brings a different growth potential and provokes a difficult transition
20??20??The age of bioThe age of bio--technology, nanotechnology and biotechnology, nanotechnology and bio--electronics?electronics?
17711771The The ““Industrial RevolutionIndustrial Revolution”” in Englandin England
18291829The age of railways, coal and the steam engineThe age of railways, coal and the steam engine
18187575The age of steel, electricity and transcontinental communicationThe age of steel, electricity and transcontinental communicationss
19081908The age of oil, automobile, air travel, petrochemicals and mass The age of oil, automobile, air travel, petrochemicals and mass productionproduction
19711971The age of information technology, knowledge and global telecommThe age of information technology, knowledge and global telecommunicationsunications
Techno-economic paradigm
Elaborates on Kondratieff cyclesEach cycle are labeled as particular TEPs
Each TEP is associated with Key industriesInfrastructuresNewly emerging industriesProductivity principlesLead economies
Each TEP is associated withNews forms of business organizationLabour relationsRegulationR&D organization
TEPs are associated with new location principles
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TWO DIFFERENT PERIODS IN EACH GREAT SURGE
big-bang Nextbig-bang
Degreeof diffusion
of thetechnological
revolution
Time
TurningTurningPointPoint
Inst
itutio
nal
Inst
itutio
nal r
ecom
posi
tion
reco
mpo
sitio
nan
d ro
le
and
role
shi
ft
The diffusion of a technological revolution works always like this (so it seems):
INSTALLATION PERIODINSTALLATION PERIOD
‘Creativedestruction’Paradigm shift
DEPLOYMENT PERIODDEPLOYMENT PERIOD
Reaping of growth and social benefits from the prevailingparadigm
2O - 30 years 2O 2O -- 30 30 yearsyears???
Tech waves
Internet& Telecomsmania
1987-2001FRENZY
Rejuvenation of mass production
industries
ICT Revolutionand stagflation
1971-87IRRUPTION
1971Intel
Micro-processor
Redeployment of mature industries
to Third World;Brasil, Korea “miracles”
,Social unrestViet Nam war
1960-74MATURITY
Transistors; computers;analog instruments;numerical control
1920-29FRENZY
RoaringTwenties
Post warGolden Age
1943-59SYNERGY
THE CHANGING FACE OF THE TWENTIETH CENTURYTHE CHANGING FACE OF THE TWENTIETH CENTURY
Crash1929
Bretton WoodsWelfare StateMarshall Plan
Dep
ress
ion
1930
Dep
ress
ion
1930
’’ s a
nd W
WII
s an
d W
WII
Collapses AsiaNasdaq collapse;
draining stock markets
Cor
pora
te s
cand
als
Rec
essi
onC
orpo
rate
sca
ndal
s R
eces
sion
……??
???
?
???
The Age of Information Technologyand Global Telecommunications
The Age of Steeland Heavy Engineering
1908Ford Model-T
1908-1920IRRUPTION
(USA)
Mass production
Oil and automobiles
The Age of Oil, Automobiles and Mass Production
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Firm patent applications, 2005 Top R and D Companies
Canada’s total in 2004 was $24.487 billion CDN or $18.8 billion US
TNC foreign affiliates are increasingly important
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R and D doesn’t always lead to innovation
Innovation means the introduction of new products, processes or services into the marketInnovations can be new to the user not necessarily to the world
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A Next Key Technology? Another key technology?
Nanotechnology is generally agreed to cover objects measuring from 1 to 100nm
Shrinking space
Major communications technologiesSatellitesFiber optics Cellular phones The InternetElectronic mass media
Satellite radio
Internet Bandwidth Hyderabad
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from: Finance and Development, March 2002, pg 9
Price of computer and peripheral equipment in 1960 (Relative to GDP Deflator, 2000=1000)Price of equivalent computer in 2000
$1,869,004
$1,000
Cost of 3-minute telephone call from New York to London in 1960 (in 2000 US$)Cost of same call in 2000
$60.42
$0.40
Reduction in cost of ocean freight transport between 1920 and 1990Reduction of cost of air transport between 1930 and 1990
70%
84%
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Digital Age
Convergence between computer and communication technologiesContinuing increases in the speed and capacity and declines in costIncreasing ease of interfaces with the internetGrowth of broadband technologiesGrowth of mobile telecommunications
Product life cycle3 ways to maintain or increase sales
Introduce a new product as the existing one becomes obsoleteExtend the cycle by making minor modifications or finding new uses for existing productMake changes in the production technology to make the product more competitive
Production process and technology
Technique of productionParticular technology used and how inputs are combined – some input substitution is usually possible
Scale of productionScale economies
Location of productionLocation affect both scale and technique
Flexible manufacturing
Manufacture: the collecting of labour into workshops and the division of the labourprocess into specific tasksMachinofacture: the application of mechanical processes and power through machinery in factories. Further division of labour
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Scientific management (Taylorism): subjecting the work process to scientific study in the late 19th century. Further division of labour with increased control and supervisionFordism: the development of the assembly line
After-Fordism: development of new flexible production systems based upon application of information technologies
The development of the production process maps closely with long wavesFirst wave – manufacture to machinofactureSecond wave – TaylorismThird wave – base of FordismFourth wave - Fordism
Mass customization – the ability of producers to make products to suit individual needs –such as PC manufacturers
Flexible technology tendencies
Trend toward information intensity rather than energy or material intensity in productionChallenge of mass production
High volume of output no longer necessary for high productivityRapid technological change less costlyNew technologies allow for profits on segmented markets rather than mass markets
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Change in labour requirements in terms of volume, type and quality of labourIncreasing fine degree of specializationIncreasing standardization and routinizationof individual operationsIncreasing flexibility in the production process
Japanese inspired after-Fordism
Flexible labour force organizationWork teamsJob rotation
Just in time systemsObsession with quality control
Diffusion of practice
Overseas expansion of Japanese firmsDemonstration effect fueled by management writers
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Positive implications
Involves re-skilling of workers because of multi-task operationsProvides workers with substantial controlTeam working and self management reduce alienationIndividualized payment systems creates incentives for workersBased on long term employment contracts
Negative implications
Team-based workforce subject to strict managerial controlEmphasis on continuous improvement places great pressure on workersIndividual payment system used to divide and rule the workforceLong term contracts only apply to core workers in large companies
Geographies of innovation
Types of knowledgeExtreme Tacit
Local relationships necessaryTacit Explicit
Only initial contact is face-to-face to build trustExplicit Tacit
Less face-to-face, ie correspondence courseExtreme Explicit
No local relationship needed
Innovative milieu
Economic, social and political institutionsKnowledge which evolves over time in a specific contextThe conventions, the understood rules and routines between partners in different kinds of relationships defined by uncertainty
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National innovation system
Regional/local innovation clustersLocalized patterns of communicationLocalized innovation search and scanningLocalized invention and learning patternsLocalized knowledge sharingLocalized patterns of innovation capabilities and performance
Operates across a variety of spatial scales
Creation: Generating new knowledge or significantly improving existing knowledge (e.g., through activities such as research);Diffusion: Sharing knowledge (e.g., through activities including collaboration, training and publishing); Transformation: Adopting or adapting knowledge for a specific purpose (e.g., developing new or significantly improved goods, processes or services);
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Use: Delivering or implementing new or significantly improved goods, processes, programs or services (e.g., selling goods or services);Value: Social or economic value from transformed knowledge (e.g., wellness, clean air, GDP growth, organizational performance, profit); Environment: The overarching conditions that influence innovation (e.g., leadership, culture, brand recognition, entrepreneurship, risk tolerance, governance, the regulatory environment, taxation, physical infrastructure, transportation systems, communications systems, global market forces, availability of skilled workers)