What are the causes of technological progress

technical progress

1. Term: Manufacture of new or significantly improved products and materials as well as the application of new processes that allow a more rational production of the known products and materials, i.e. makes it possible to produce a given product quantity at lower costs or a larger quantity of the product with constant costs.

The term technical progress is judgmental because progress can only be spoken of with regard to a very specific objective; the side effects associated with technical progress (substitutions, rationalizations and thus any loss of qualifications due to the introduction of new technologies, new shifts in workloads, job losses for those affected) are not included.

2. Origin: Technical progress arises through innovations in which three phases are distinguished:
(1) phase of Invention (Invention): Elaboration of scientific and technical knowledge, research and development results and inventions.
(2) phase of Innovation: The first commercial application leads to the expansion of technical skills and the emergence of product, material and / or process innovations; The main activities include design, experimentation with prototypes, assembly-ready application and utilization in production and initial marketing efforts.
(3) phase of Diffusion: The innovations are economically exploited by means of marketing activities and technology transfer in the form of materials, products, processes (capital goods), patents and licenses; their application thereby spreads (diffuses).

3. Species: a) Potential technical progress: technical progress that is feasible at the moment or in the immediate future based on the state of scientific and technical research and development (research and development (R&D)).

b) Realized technical progress: Only a part of what is technically, operationally and socially possible (technology impact assessment) is actually implemented; political and above all economic criteria are decisive (technology management).

c) Unbound technical progress(non-embodied technical progress) exists when it is not tied to the use of new machines (or workers) (Disembodied Technical Progress).

d) Tied technical progress on the other hand, it can only be realized if new machines or newly trained workers are used (Embodied Technical Progress).

e) In the early days of growth theory, only that was considered autonomous technical progressthat falls like "manna from heaven". Technical progress, which is attributed to certain causes, is called on the other hand induced technical progress.

4. Effects: Technical progress is called neutral denotes, if it does not change the distribution of income, more precisely: the division of the factor income into wages (including salaries) and interest, if the production factors labor and capital are rewarded according to their marginal product (marginal productivity theory).

5. Current discussion: In the work of the new growth theory, the explanation of technical progress and thus the explanation of the decisive determinant of economic growth is at the center. It is assumed in these approaches that technical progress through research and development (R&D) is produced by rationally acting actors. It is not the basic research carried out by the state or state organizations, but rather the R&D carried out by profit-oriented companies that plays the more important role with regard to growth impulses. The approaches tie in with Schumpeter's theory of profit-oriented innovation efforts by dynamic entrepreneurs.

See also evolutionary growth theory, growth theory.