Models of technological development and their relevance to advances in transportation

This study presents a general theory of technological development. In essence, two factors play an important role in the process of innovation. One is “learning” or acquisition of relevant production skills; the other is scale of operations of technology. The theory is applied to a variety of cases of innovation in the locomotive, tank ship, and aircraft technology over the course of time. It is suggested that the role of learning is far more important than hitherto recognized. In particular, development of new techniques is based on the rules of thumb rather than on the search for an objective optimum. The empirical results of the study further indicate that the process of learning in the development of transportation technology appears to have taken place largely in the capital-producing rather than in the capital-using sector. This confirms a conjecture of long-standing: at least in some sectors of the economy, all investment has the character of investment in R&D. Further, the role of learning is found to have been comparable to growth of scale. Thus, acquisition of production skills may well be an important alternative to large-scale technology. It is concluded that the process of technological change is appropriately viewed from the inside out rather than exclusively from the outside in.