Diffusion and scale dynamics: A case study

This paper examines the relationship between the diffusion of a major process innovation, oxygen steel-making, and the growth of plant sizes. As in some previous studies, a step-wise pattern of scale increases is observed; however, there is no stable correlation of these increases to cumulative capacity expansion, maximum plant sizes appear to have stabilized, and plants of widely dispersed capacities continued to be built as oxygen steel-making became the dominant technique, world-wide. Factors responsible for scale increase are analyzed; steadily growing equipment size, the addition of equipment to existing plants, and a wide range of minor innovations and adaptations have contributed to growth in plant capacities; in most instances, scale-up continued after the beginning of operations. It is concluded that the frequently-used concept of an optimal, or maximum feasible, plant scale remains ambiguous without reference to the specific technical and economic conditions of production systems, and that plant-size increases are fully dependent on continuing technological effort.