Measuring technological change: Aircraft turbine engines

Recent Rand research indicates that improved estimates of costs and schedules might be obtainable for the development and procurement phases of the system acquisition cycle if techniques were available to assess the technological advance being sought. This report describes the development and testing of such a technique using the technology of aircraft turbine engines as an example. The measure of technological advance developed in this study is intended to capture mainstream trends. It is not able to identify fine differences among turbine engines or to distinguish small differences in contractor proposals. It is intended to provide a broader understanding of the technological advance being sought in an engine development program and to provide information for use in making decisions concerning development policy. Multiple regression analysis is used to estimate a multidimensional tradeoff surface of the parameters characterizing engine technology and to trace out the movement of the tradeoff surface over time. The equation with the best statistical properties contained parameters thought to be important in turbine engine development and had coefficients consistent with a priori notions of technological change.The data base included the first model of a given turbine engine to pass the Model Qualification Test required of all American production engine types of the past 30 years. Examination of the history of turbine engine progress suggests very strongly that single parameter analysis cannot capture the richness of the development process. The data were divided into a number of subsamples covering various time periods to test whether the shape of the tradeoff surface changed over time. When divided into equal halves, the subsamples were indistinguishable. Divided by thirds, the most recent period showed a slight increase in the rate of technological advance, but the increase was barely significant statistically. In nine out of ten cases, the rate of increase of technology of growth versions of engines was less than the average trend of technology for new engines. This result indicates that when design features are frozen in hardware, technology growth cannot take full advantage of newly developed techniques.     

How firm capabilities affect who benefits from foreign technology

We explore how firm capabilities affect the diffusion of technology brought with foreign direct investment (FDI). Using a panel dataset on Indonesian manufacturers from 1988 to 1996, we measure how the productivity of differing domestic firms responds to the entry of multinational competitors. We find that firms with investments in research and development and firms with highly educated employees adopt more technology from foreign entrants than others. In contrast, firms that have a small “technology gap,” meaning that they are close to the international best-practice frontier, benefit less than firms with weak prior technical competency. This finding suggests that the marginal return to new knowledge is greater for firms that have more room to “catch up” than it is for already competitive firms.     

A proposed convention for measuring the state of the art of products or processes

During 1980, The Futures Group performed a study under contract to the National Science Foundation to devise a convention for describing—in quantitative terms—technological state of the art of essential any technology. In designing this convention we hope that different analysts, working independently, would be able to arrive at a similar conclusion about the state of the art of a technology under study. With such a measure at hand, it would be possible, for example, to evaluate the effectiveness of investment in R&D by evaluating the improvement in the technological state of the art of a given technology, per unit investment.The form of the equation chosen for the state-of-the-art convention was SOA = K₁(P₁/P'₁ + K₂(P₂/P'₂) ? K_n(P_n/P'_n) where SOA = state of the art, K_n = the relative weight associated with each parameter describing the technology, P_n = the value of the particular parameter useful in describing the state of the art, and P'_n = a reference value of the parameter. Various approaches to the selection of the parameters and their weights were described. Of particular interest is a statistical approach which assumes that the state of the art, over time, is an S-shaped curve. In this instance it is possible to compute the value of the weights through an iterative numerical technique.The convention was applied to two technologies: computers and antibiotics, and state-of-the-art measures were developed for each. In the case of antibiotics, selected organism/antibiotic pairs were analyzed to identify the state of the art of a particular antibiotic as applied to the control of a particular microorganism, over time.     

A model of “coupled” technology transfer : A logistic curve approach

This article presents a mathematical model relating to the technology transfer problem. The origin of the problem stems from the existing trade-offs between the strategies of “technological progressiveness” and “static efficiency” employed by firms or countries defined as “leaders” and “followers,” respectively. The formulation of the model is based on the assumption that the technological development of a firm or a country follows a logistic growth curve when related to a specific technology. During the process of a “coupled” technology transfer, the development of the follower changes and its behavior is described by a first order nonhomogenous deferential equation. Different scenarios of the “coupled” technology transfer between the leader and the follower are being discussed.     

The man-machine interface

The basic objective of this article is to define a composite measure of human capabilities that could also be used to measure the “skill” requirements of various manufacturing tasks. In the course of our research, however, we have come to the conclusion that most human workers (at least in the “semiskilled” categories) are not employed for their manual skills, or dexterity, but for a different purpose. Although our basic objective remains unchanged, our research focus has shifted to the emerging competition between human workers as machine process controllers in certain highly engineered environments, and the use of sensor-based, computerized systems for the same purpose.     

Concatenate coordination and mutual coordination

We tell of the evolving meaning of the term coordination as used by economists. The paper is based on systematic electronic searches (on “coord,” etc.) of major works and leading journals. The term coordination first emerged in professional economics around 1880, to describe the directed productive concatenation of factors or activities within a firm. Also, transportation economists used the term to describe the concatenation of routes and trips of a transportation system. These usages represent what we term concatenate coordination. The next major development came in the 1930s from several LSE economists (Hayek, Plant, Hutt, and Coase), who extended that concept beyond the eye of any actual coordinator. That is, they wrote of the concatenate coordination of a system of polycentric or spontaneous activities. These various applications of concatenate coordination prevailed until the next major development, namely, Thomas Schelling and game models. Here coordination referred to a mutual meshing of actions. Game theorists developed crisp ideas of coordination games (like “battle of the sexes”), coordination equilibria, convention, and path dependence. This “coordination” was not a refashioning, but rather a distinct concept, one we distinguish as mutual coordination. As game models became more familiar to economists, it was mutual coordination that economists increasingly had in mind when they spoke of “coordination.” Economists switched, so to speak, to a new semantic equilibrium. Now, mutual coordination overshadows the older notion of concatenate coordination. The two senses of coordination are conceptually distinct and correspond neatly to the two dictionary definitions of the verb to coordinate. Both are crucial to economics. We suggest that distinguishing between the two senses can help to clarify “coordination” talk. Also, compared to talk of “efficiency” and “optimality,” concatenate coordination allows for a richer, more humanistic, and more openly aesthetic discussion of social affairs. The narrative is backed up by Excel worksheets that report on systematic content searches of the writings of economics using the worldwide web and, using JSTOR, of Quarterly Journal of Economics, Economic Journal, Journal of Political Economy, American Economic Review, and Economica.     

Technology adoption and LDC firms

In a duopoly framework we show that among the set of firms competing with the technology leader, both relatively advanced and relatively backward firms will not be likely adopters of the superior technology. Instead, the firms in the “middle” will invest for adopting the superior technology. This particularly characterizes the innovation characteristic of LDC markets where backward firms exist along with technology super-powers.     

Interdisciplinary problems in doing impact assessment : The case of Lake Shelbyville

A multidisciplinary team of biologists, economists, engineers, planners, and sociologists were assembled to do an ex-post facto analysis of a flood control reservoir ten years after initial operations. Within the context of a research university, the authors suggest ways to 1) improve project administration, 2) combat disciplinary chauvinism, 3) facilitate the understanding and exchange of data across disciplines, 4) reward the work of graduate students in a fair and equitable manner, and 5) assist the principal investigator in achieving the goal of an interdisciplinary study. The importance of project associates in the day-to-day operation of the study is reviewed in detail.This paper details the administrative problems of the University of Illinois' interdisciplinary effort to examine the “real” environmental impacts of the Lake Shelbyville reservoir 10 years after it had begun operation. Lake Shelbyville is a U.S. Army Corps of Engineers reservoir located in east-central Illinois. Land acquisition began in 1962 and the reservoir was in operation by 1971. While not implying that “apples and oranges” don't mix, problems do result when we try to bring together a group of disciplinary researchers. We write with the hope that the suggestions outlined here will keep environmental impact assessment research interdisciplinary. One of the reasons for the present “environmental fix” is the single discipline approach to environmental problems.A true interdisciplinary effort is necessary for a comprehensive assessment of the impacted physical and social environments, yet “interdisciplinary” can easily become a false label. If the principal investigator and researchers are not attentive to project administration on a day-to-day basis, the old saying about integrating findings “with a staple” can easily result. Rather than integrated assessment, the study report may resemble a series of miniature discipline based projects that read like the list of university departments.     

The research strategy in management of technological innovation

The increasing importance of technology in the application world has imposed high demand on the research community for insightful and useful principles about “management of technological innovation” (MTI). This paper examines the academic legacy in terms of conceptual categories, causal relationships and taxonomy of relevant systems, and asserts from a system perspective that MTI as an applied science is still in its infancy.Based on methodological argument, this paper warns of the danger of hasty compromise of strategically important topics to “popular” definition of “researchability,” and suggests several research guidelines and approaches for this young interdisciplinary discipline:

1. (1)To explore new frontiers, use “proximate variables,” consider contextual factors and causation in broad terms, conceptualize “independently,” and pay more attention to case study method.

2. (2)To understand driving forces, be aware of practice, and focus on internal dynamics.

3. (3)To transcend complexity, adopt a hierarchical structure perspective and state-and-flow concept, and condense findings into configurations.

Finally, this paper urges the formation of an overall research strategy to accelerate the accumulation of MTI grounded knowledge.     

Control of SO2 emissions from power plants: A case of induced technological innovation in the U.S.

This paper investigates how the details of government actions induce innovation—the overlapping activities of invention, adoption and diffusion, and learning by doing—in “environmental technology,” products and processes that either control pollutant emissions or prevent emissions altogether. It applies multiple quantitative and qualitative measures of innovation to a case subject to several “technology-push” and “demand-pull” instruments: sulfur dioxide control technology for power plants. The study employs analyses of public R&D funding, patents, expert interviews, learning curves, conference proceedings, and experience curves. Results indicate that: regulation and the anticipation of regulation stimulate invention; technology-push instruments appear to be less effective at prompting invention than demand-pull instruments; and regulatory stringency focuses inventive activity along certain technology pathways. Increased diffusion of the technology results in significant and predictable operating cost reductions in existing systems, as well as notable efficiency improvements and capital cost reductions in new systems. Government plays an important role in fostering knowledge transfer via technical conferences, as well as affecting the pattern of collaborative relationships within the technical research community via regulatory changes that affect the market for the technology. Finally, the case provides little evidence for the claim that cap-and-trade instruments induce innovation more effectively than other instruments.     

At the crossroads of “futurism” and “prospective”: Towards a Canadian synthesis?

North American “future studies” and the French concept of “prospective” have been integrated to provide the basis for an attempted “Canadian Synthesis” in the approach developed by the Montreal-based think-tank, the Gamma Institute. In this paper the founding president of Gamma outlines the four stages of the approach in a conceptual framework entitled the “Chronospace” and illustrates its applicability by referring to some of Gamma's projects in the last 12 years.     

An exceptional development pattern

This paper investigates India's exceptional development pattern, specifically the major importance of information technology services (ITS), and compares it with China's development pattern. Both countries want to develop capabilities for carrying out the innovation of technologies that compete at the state-of-the-art in the world market. The paper posits that technological/economic success in the contemporary world market requires the ability to innovate complex technologies and complex technology-related services. The share of trade represented by complex technologies is compared with the “high-tech” share. The trading patterns of the two countries are compared using United Nations data. Two case studies of Indian ITS companies are then compared with two case studies of Chinese manufacturing companies. Historical and cultural differences appear to explain some of the differences in the development patterns of the companies located in the two countries.     

Anticipating the future high-tech competitiveness of nations: Indicators for twenty-eight countries

This article presents some of the major results obtained during the third phase of a continuing research effort to develop and implement national indicators of competitiveness in high technology industries. The first phase, begun in 1987, developed a conceptual model of the processes by which industrializing nations gain access to external technology and technical information, absorb that technology/information effectively, and institutionalize a science-based development and manufacturing capability leading to export-led growth in high technology products. Four “input” or leading indicators of a nation's future capacity (15-year time horizons) to compete in international markets in high technology products were developed, as were three “output” indicators of a nation's current international competitiveness. During this first phase, the seven indicators were applied to data for twenty countries representing a range of regions and extent of industrialization. The second phase used 1990 data on an expanded set of countries to examine in detail the indicators' reliability and validity. The third phase of indicators work (1992–1995): (1) developed seven indicators whose definitions were recommended in our 1991 final report to the Science Indicators Unit of the National Science Foundation, and (2) collected the necessary data (1993) and applied them to generate a set of indicators for 28 countries using these recommended formulations.This article focuses on the input indicators for the 28 countries and compares these 1993 results with those from 1990. We discuss the implications of these results for technology-based development theory and for development policy. A separate, companion article published elsewhere presents the output indicator results.     

Societal aspects of technology assessment

Despite earnest admonitions in most technology assessments that institutional arrangements, social impacts, and societal implications be taken into account, the methodology commonly used not only systematically and systematically excludes these very dimensions but often creates a distorted focus. The paradigm dominating structural modeling in technology assessment is technically-oriented; the techniques, lineal descendants of systems analysis, are no more reliable for “assessing” the uncertain future than have been their ancestors in “managing” the present.     

Do misalignments predict aggregated stock-market volatility?

This paper considers forecasting regressions of “realized volatility” on a misalignment measure. Results show that this misalignment measure is useful to predict in and out-of-sample stock-market volatility at monthly horizons. The analysis also suggests a threshold effect.     

Can Japan succeed in “Chigyo-ka” (intelprise-formation)?

There are two aspects in today's information revolution that started in the late 1970s. The first is an aspect referred to as “the third industrial revolution,” which triggers the transition to the “21st century system of Industrialization.” The information revolution in this sense brings the creation of new “breakthrough industries (new multimedia industries).” And the second aspect of the information revolution possesses the characteristics of both a technological revolution and a social revolution and brings about the arrival of the third phase of the historical evolutionary process of the modern civilization, which proceeds through three phases, namely “militarization, industrialization, and then informatization.”If the bearers of modern industrialization are a “group of enterprises” that have been engaged in the race in order to gain “wealth” (generalized means of exchange/exploitation power), and if these enterprises' activities have been exercised in the world market where their products have been sold, then it is appropriate to call the bearers of informatization a “group of intelprises.” They will be engaged in the race to gain “wisdom” (generalized means of persuasion/induction power), then stages of their activities can be called a “global intelplace” where “sharables,” that is, information and knowledge, will be disseminated. And now, toward the 21st century, the third phase of modernization, which can be called the “informatization/intelprise formation” or the “wisdom game” (intellectualism), is about to begin.Japan's “ie society (a society based on the ie principle—literally, it means “house” but here it is interpreted as cultural principle for organizing a society), which has been going through the process of evolution on the Japan Archipelago, has developed a network-based organization with little stratification within its infrastructure. In this sense, Japanese society can be characterized as a “network-oriented society” in which intelprises and an intelplace in the broad sense have functioned as the essential components of the society since Middle Ages. In general, an intelplace and intelprises that operate actively within this framework serve as the flexible bases for different types of social relations and institutions, such as states and markets and eventually integrate these into the society to a certain extent. In fact, it took place quite regularly during the modernization “in the narrow sense,” or Westernization of Japanese society after the Meiji Restoration. There exist some problems, however. Some of the characteristics found in Japanese society may become obstacles to activities aimed at the sharing and promotion of information and knowledge in the global intelplace and Japanese participation in the “wisdom game.” Badly needed are serious efforts for Japanese intelprise-formation to reduce these obstacles as much as possible.     

The process of applied technology forecasting : A study of executive analysis, anticipation, and planning

The objective of this research is a study of technology forecasting not only as a discipline but also as an executive responsibility by applying the information processing theory to this task. A protocol analysis from Ericsson and Simon, modified for this study, was used for the analysis of interview data of top executives from the magnetic resonance imaging industry and their superconducting magnet suppliers, when they had to face a specific technological event. The technological event is the breakthrough discovery of ceramic superconducting materials in 1986, and the fast technological progress that followed between 1987 and 1989. This paper illustrates the processes through which senior executives collect information, process it, and develop plans and predictions in the context of “hard” uncertainty. We use cognitive and strategic decision-making research to develop a normative typology of executive decision making in similar contexts.     

Conceptions of the dual economy

Due to the current labor market problems and to the increase in personal “free time,” the “other half” of the economy is attracting increased attention: the household economy, the informal sector, black labor, the shadow economy, etc. The purpose of this paper is to summarize the current terminology and conceptual diversity in this field, in order to clarify the notions and thus the theoretical approaches which are a prerequisite for further work at the present stage of research.     

A brief technology assessment of the Carbon Dioxide effect

Significant increases in atmospheric carbon dioxide are occuring as a result of fossil fuel combustion. More than a four-fold increase over preindustrial levels may occur by the year 2100. Heating of the atmosphere, changes in precipitation patterns and global storm paths, and other resulting effects are sure to cause significant social changes. This article is essentially a methodological case study demonstrating a useful but inexpensive type of technology assessment. It summarizes current research findings on “the CO₂ effect,” and presents hitherto unpublished findings that resulted from a brief but systems-oriented approach. These findings suggest that most published forecasts of phenomena associated with a CO₂ buildup may be systematically low because various positive feedback relationships are not reflected.     

The role of factor substitution in the theory of economic growth and income distribution: Two examples

While much empirical evidence suggests that the Cobb–Douglas production function may be a reasonable benchmark for aggregate analysis, we argue that the practice, particularly prevalent in contemporary growth theory, of adopting the Cobb–Douglas technology, may lead to misleading implications. Using two examples, we show that key implications of the models are highly sensitive to small deviations of the elasticity of substitution from unity. The first employs the standard neoclassical model and emphasizes the sensitivity of the speed of convergence to small changes in the elasticity of substitution. This in turn has profound consequences for wealth and income distribution. The second deals with foreign aid and highlights how the relative merits of “tied” versus “untied” aid are also very sensitive to the elasticity of substitution.