DYNAMICS OF TECHNOLOGICAL CHANGE

Transcription

1 DYNAMICS OF TECHNOLOGICAL CHANGE

2 DYNAMICS OF TECHNOLOGICAL CHANGE Louis A. Girifalco The University of Pennsylvania tnm;i VAN NOSTRAND REINHOLD ~ NewYork

3 Copyright 1991 by Van Nostrand Reinhold Softcover reprint of the hardcover 1 st ed ition 1991 Library of Congress Catalog Card Number ISBN-13: e-isbn-13: : / All rights reserved. No part of this work covered by the copyright hereon may be reproduced or used in any form by any means-graphic, electronic, or mechanical, including photocopying, recording, taping, or information storage and retrieval systems-without written permission of the publisher. Van Nostrand Reinhold 115 Fifth Avenue New York, New York Chapman and Hall 2-6 Boundary Row London, SEI 8HN, England Thomas Nelson Australia 102 Dodds Street South Melbourne 3205 Victoria, Australia Nelson Canada 1120 Birchmount Road Scarborough, Ontario MIK 5G4, Canada Library of Congress Cataloging-in-Publication Data Girifalco, L. A. (Louis A.) Dynamics of technological change / Louis A. Girifalco. p. cm. Includes bibliographical reference and index. 1. Technological innovations. I. Title. II. Title. Technological change. T173.9.G O-dc CIP

4 To the memory of my father who lived his life for family, honor, and truth and to my advisor, Robert J. Good, who transformed me from a student into a colleague

5 Contents List of Figures in Text x List of Figures in Appendix 1 List of Tables in Text XIV Preface XVII Xlll Chapter 1. Basic Concepts of Technological Change 1 Defining Technological Change 1 Measuring Technological Change 8 Theories of Technological Change 12 Determinants of Technological Change 20 Enterprises, Systems, and Hierarchies 28 Five Patterns 30 Interactions Among Systemic Trends 40 A Systemic Model of Technological Change 40 Chapter 2. Technical Progress and Performance 46 Aspects of Technological Progress 46 Measurement of Technical Performance 49 Case Study: Aviation 55 The Learning Curve 60 Production Costs and the Learning Curve 63 Case Study: Farm Tractors 67 Case Study: Underground Coal Mining 73 Chapter 3. Innovation, Research, and Development 80 Clusters and Waves 80 Frequency of Innovation 81 The Origin of Clustering 86 Inventions and Time Lags 88 Innovation and Business Cycles 91 The Origins of Innovations 95 The Effect of Corporate Size 99 Functions of R&D 101 Definitions of Success in R&D 104 Technological Cycles and R&D 106 The Technology-Driven Corporate Cycle 109 Technological Discontinuities 112 vii

6 viii Contents The R&D Portfolio 115 Characteristics of Industrial R&D 119 Determinants of Successful R&D 123 Chapter 4. Technological Diffusion and Substitution 130 Technological Diffusion 130 Diffusion Analysis 136 Substitution Analysis 143 Multilevel Substitution 145 The Diesel Locomotive: An Example of Binary Substitution 148 The Diffusion of Radio Broadcasting 154 Steelmaking: An Example of Multilevel Substitution 160 Results of Diffusion and Substitution Studies 165 Nuclear Power: A Case of Interrupted Substitution 169 Diffusion and the Clustering of Technologies 170 Some Comments on Causal Factors 173 Chapter 5. The Dynamics of Energy Usage 176 The Energy Transition 176 Energy Sources 183 Energy in the Economy 185 The Efficiency of Energy Utilization 195 Patterns of Consumption 205 The Energy Inventory 215 Patterns of Production: The Hewett-Hubbert Model 225 Chapter 6. The Electronic Digital Computer 230 Significance of the Computer 230 The Precursors 233 COLOSSUS 241 The ENIAC 242 Turing and von Neumann 247 Downfall of the Moore School 251 Post-ENIAC Machines 253 Computer Companies 258 Evolution of Modern Computer Technology 266 Computer Performance 269 Diffusion of Computers 279 Summary 282 Chapter 7. The Industrial Transition Measures of Industrialization World Industrialization Economic Growth and Industrialization 295 Postwar World Economic Growth 298

7 Contents ix Catch-Up 302 The First Transition 305 The American Transition 309 Material Resources 321 Materials and World Industrialization 326 Appendix 1. Mathematics of Technological Growth 335 Forms of Growth Laws 339 Properties of the Exponential 343 Properties of the Logistic 348 Properties of the Decaying Exponential Rise 351 The Gompertz Equation 353 Superacceleration 354 Competitive Growth 356 Multilevel Substitution 359 The Lognormal Distribution 360 Horizontal Analysis 366 Learning Curves and Technological Progress 366 Data Smoothing 370 Appendix 2. Chronology of Innovation 372 Appendix 3. Data Tables 411 List of Tables 416 References 490 Additional Readings 495 Index 515

8 List of Figures in Text Long Cycles of Innovation According to Mensch 32 Efficiency of Incandescent Lamps 33 Efficiency of Fluorescent Lamps 34 Efficiency of Artificial Light Sources 35 Percent of Households with Television 36 Learning Curve for Pressman Productivity 38 Frequency Distribution of Research Funds at Ninety-One Universities 39 Schematic of the Systemic Model of Technological Change Horsepower to Engine Weight Ratio of Reciprocating Aircraft Engines 56 Consecutive Maximum Cruising Speed of U.S. Commercial Aircraft Passenger Miles per Hour of Commercial Aircraft (Consecutive Values) Maximum U.S. Military Aircraft Speeds Cost Curves for Learning and Prorating of Initial Costs: Low Production Volumes Cost Curves for Learning and Prorating of Initial Costs: High Production Volumes Successive Maximum Tractor Fuel Efficiencies Mechanical Efficiency of Tractors Total Efficiency of Tractors Learning Curve for Fuel Efficiency of Tractors Learning Curve for Total Efficiency of Tractors Cumulative Number of Tractors Produced Worldwide Labor Productivity in Underground Coal Mining Test of Learning Curve Equation for the Productivity of Underground Coal Mining Nine-Year Running Sum of Major Innovations from Data of van Duijn Nine-Year Running Sum of Innovations from Data of Girifalco Innovations in the Farm Equipment Industry: Five-Year Running Sum Major Semiconductor Product Innovations: Five-Year Running Sum Major Semiconductor Process Innovations: Five-Year Running Sum Number of Television Innovations per Decade Number of Major Inventions: Nine-Year Running Sum Time Lags Between Inventions and Innovations Mean Time Lags Between Inventions and Innovations Ideal Technological Growth Curve 108 x 44

9 List of Figures in Text xi Ideal Technological Productivity Curve 108 Productivity Advantage of a New Technology 109 Model Corporate Growth Curve 110 Market Shares of Piston, Turboprop, and Jet Engine Aircraft The Technological Discontinuity 114 Technology Portfolio of Petrov 117 The Dynamic Technology Portfolio 118 The Generalized Logistic with Different Delay Coefficients Fraction of New and Old Technologies During a Substitution Three-Level Technological Substitution 148 First Adoptions of the Diesel Locomotive 150 The Number of Diesel Locomotives in Service in the United States Fraction of Diesel and of Steam Locomotives in Service in the United States 152 Number of Commercial Radio Stations in the United States 160 Percent of Households with Radios in the United States: Curve Computed from P = 1 - exp( *YR ) 161 Multilevel Substitution of Steelmaking Technologies 164 Fraction of Electricity Generated by Nuclear Energy in the United States: Curve Computed from F = 1/[1 + exp( * YR )J 170 Annual Telegraph Messages per Capita for Western Union Incandescent Lamps per Capita Produced in the United States Long-Term Energy Usage versus Time 177 Annual Energy Consumption in the U.S. per Capita 177 Fraction of Fuel Use from Mineral Sources in the United States Fraction of Energy Consumption by Source 179 World Energy Consumption per Capita 182 Integral Distribution of per Capita World Energy Consumption United States Fossil Fuel Costs as Fraction of GNP Expenditures on Fuel and Electricity in the United States as a Fraction of GNP 188 Relation Between GNP and Energy Consumption in the United States 189 Energy-GNP Ratio for the United States 191 Relation Between Energy Consumption and GDP for 102 Countries in Relation Between Energy Consumption and GDP for 106 Countries in Steam Engine Efficiencies Thermal Efficiency of Electricity Generation Rail Freight Transport Efficiency in Ton-Miles Per tooo Btu's Miles per Gallon of U.S. Passenger Vehicles Flow of Energy from Source to End Use Fraction of Energy Use in Economic Sectors Electricity Production in the United States Percent of United States Dwellings with Electric Service: Curve Computed from P = exp( *yr )

10 xii List of Figures in Text 5-21 Fraction of Primary Energy Consumption Used for Electricity Generation in the United States Total United States Annual Oil Consumption Auto Registrations per Capita in United States Classification of Mineral Resources Cumulative Oil Production in the United States Annual Production of Oil in the United States Maximum Scientific Computing Power Maximum Commercial Computing Power Computer Power per unit Cost in Operation per Second per Penny Maximum Addition Rate for Computers with Higher Addition Rates than any Previous Computer Successive Maxima of Computer Power: NSF Index Successive Maxima of Computer Power: L.A.G. Index Using NSF Data: In(index) = [2ln(speed) + In(memJl NSF Data for Memory and Speed of Computers NSF Data on Computer Cost for Computers with Maximum Performance in KOPS Per Dollar The Diffusion of Computer Capacity in the United States in OPS per Capita Ratio of Industrial Level of U.S. and U.K. to the Rest of the World Ratio of Industrial Level of Developed to Underdeveloped Countries Industrial Level of the United States and the United Kingdom as a Function of Time Industrial Level of Japan as a Function of Time Industrial Level of the World as a Function of Time Growth Rate of Industrial Level Versus Date of Industrial Takeoff Consumption of Steel per Capita in the United States: Five-Year Moving Average Installed Nonautomotive Horsepower in the United States Installed Horsepower in Factories and Mines in the United States Installed Horsepower on United States Farms Installed Horsepower in Electric Generating Plants Automotive Horsepower per Capita in the United States GNP per Capita From Berry/Rostow Data: Five-Year Moving Average GNP per Capita From Government Data Silver Production Cycles of the Comstock Lode The Demographic Transition 331

11 List of Figures in Appendix 1 At-t At-2 At-3 At-4 At-5 At-6 At-7 At-8 At-9 At-tO At-l1 At-t2 At-t3 The Exponential Curve 344 The Logistic Curve 349 The Rate Curve for the Logistic 350 The Decaying Exponential Rise 352 The Rate for the Decaying Exponential Rise 353 The Gompertz Curve 355 The Rate for the Gompertz Curve 355 The Super Acceleration Curve 356 The Normal Distribution 36t The Lognormal Distribution 364 The Lognormal Integral 365 The Learning Curve 368 The Cost Reduction Curve 369 xiii

12 List of Tables in Text 2-1 Learning Rate Parameters for the Production of Machine Tools Learning Rate Parameters for Products in Different Industires Percent Share of Industry and of Innovation for the Four Largest Firms Characteristics of the Technology-driven Corporate Cycle Time Constants for the Spread of Diesel Locomotives Multilevel Substitution Parameters for Steelmaking Data From Mansfield's Study of Adoptions Fisher-Pry Results for 17 Substitutions Diffusion of Appliances in American Households Periods of Highest Growth Rates for the Diffusion of Technologies in the United States Properties of Various Coals U.S. Energy Costs and Expenditures in Efficiencies in the Steps of Converting Fuel to Work in an Average Automobile: Possible Efficiency Improvements for Automobiles Efficiency of Use of Electricity for Various Devices Percentage Consumption of Fossil Fuel Minerals by End Use for Estimates of World Fossil Fuel Resources Estimates of Nuclear Fuel Resources Estimates of World Renewable Resources Half Life in the Production Cycle of Fossil Fuels as Computed from the Hubbert-Hewett Model Values of the Technological Progress Parameter From 1952 to Values of the Technological Progress Parameter From 1962 to Annual Percentage Growth Rates in Average Computer Power at Constant Cost for Scientific and Commercial Computing Percentage Share of Computer Installations in the U.S. Economy Systemic Growth Rates of GNP Per Capita From Data of Rostow Growth Rates of GDP Per Capita for Selected Industrialized Countries in Percent Per Annum Distribution of Growth Rates per Annum of GDP per Capita for Countries of the World and for World Population Catch-up of Some Industrial Countries to the United States: Real GDP Per Capita; U.S. = 100; (Lipsey and Kravis 1987) 303 xiv

13 List of Tables in Text xv 7-5 Ratio of per Capita GDP in 1984 to That in 1950 Computed From Data of Lipsey and Kravis (1987) for National Groupings Ratio of per Capita GDP in 1984 to That in Curve Fitting Parameters for Real GNP per Capita in the United States Ore Grade, Copper Content and Energy Costs at Cuajone Resource Inventory of the Most Commonly Used Elements Referred to World Consumption in

14 Preface Technology is not an end in itself, but a way of satisfying human wants. It shows us how to solve the age-old economic problem of surviving and prospering in a hard world. But to optimize the benefits of technological advance requires an understanding of how it happens. The purpose of this book is to provide some of that understanding. The subject is so enormous and so intertwined with every human activity that a small selection of it, and that from a special viewpoint, is inevitable. The selection of subject matter has been, of course, conditioned by what interests me and is somewhat heterogeneous. However, it is connected by two major themes. The first is that it emphasizes the dynamic nature of technology, in the sense that it must be approached as a process evolving in time that can often be described in quantitative terms. The second is that I have chosen topics that I believe are essential for a strategic sense of how to plan for, execute, and respond to technological change. These two themes complement each other because the strategic sense requires an appreciation of the dynamics and the dynamics naturally lead to a consideration of how to deal with technology so that it can be used to achieve human objectives. The unifying thought behind the book is that technological change has a systemic as well as an idiosyncratic aspect. While much of change is the result of unique circumstances and events, even more can be described as a regular evolution in time. It is these systemic regularities that hold the key to understanding technological change in the large and that provide us with strategic tools. One objective of this book is to show that this approach provides a coherent framework that illuminates many aspects of the technological process. I have adopted quantitative methods, historical desciption, and case studies in developing the subject matter, but this is not a book of case studies, a history, or a text on mathematical methods. I have brought in engineering, social, and economic considerations as needed, but this is a text on none of these subjects. Much of the material is new and originates with me; I have treated existing data in new ways, but this book is not intended to be a research monograph. The purpose of this text is to help its readers learn about technological change from a particular viewpoint that is not only academically sound but also useful. Technological change occurs as a group of evolutionary organic processes punctuated by revolutionary changes that constitute new beginnings. These processes range from general industrialization to the improvement of a specific industrial process, with time scales ranging from centuries to months. A long-range historical perspective is therefore necessary, as well as an understanding of short-term change. Topics have been chosen to illustrate this xvii

15 xviii Preface dichotomy and to display the interrelations among long- and short-term processes, the hierarchical relations among technologies and subtechnologies, and the critical importance of nested time scales in technological progress. The fundamental concepts of technological change and its treatment as a systemic phenomenon are presented in Chapters 1 to 4. These chapters describe the tools needed for an organized understanding of technological dynamics. The first chapter deals with the necessary definitions of terms and provides an overview of the systemic model, with introductory examples of the quantitative measures on which the book is based. The next three chapters elaborate on these ideas in detail and present specific examples of the quantitative description of the origin, development, and diffusion of technology. While some discussion of specific technologies is included in the first chapters, these are given in the context of the methodology being presented. The systemic nature of technological change is best understood from an extensive consideration of specific technologies. I have chosen energy and computers for this purpose. Chapter 5 deals with energy usage, encompassing some of the most pervasive and critical technology in existence. The availability of energy in large amounts is essential for a technological society, and the dynamics of energy usage is an excellent field for the application of the systemic understanding of technological change. Chapter 6 focuses on the electronic digital computer which is the technology that is characteristic of postindustrial technology as energy is for industrial technology. It is the basic technology on which much else depends. The transition from an agricultural to an industrial society is discussed in Chapter 7. Some historical sense of how far the modern industrial world differs from its predecessors is essential for anyone who wants to understand the processes of technological change and their implications. Some comment about the use of mathematics in this book is necessary. First, the required mathematics is rather simple. Elementary methods suffice for a remarkably large part of the quanitative analysis of technological change. To a large degree, this reflects the fact that such theory is still in an early stage of development. Second, the important mathematical results can all be displayed graphically, and I have made extensive use of graphs. The major mathematical considerations have been collected into an Appendix so that the reader can choose how deeply to go into mathematics. The object in doing this was to make the material accessible to as wide an audience as possible. The readers envisioned for this book are those who wish to learn about technology from a dynamic, analytical perspective and those who, now or in the future, must take part in technological decision making. The latter include engineering and business school students at the senior or graduate level. I have, in fact, been teaching courses for the past five years based on the material in this book to students from Engineering, Business, and the Arts and Sciences. lowe a great deal to my students, whose critical faculties combined with a receptivity to new ideas have helped me to refine many

16 Preface xix aspects of this book. Engineering and R&D personnel, project managers, corporate planners, and indeed anyone who must have some strategic sense in dealing with technological change should find this book of value. Since it represents a systemic approach to technological change, it provides a framework within which specific problems in the innovation process for specific technologies can be addressed. It is my belief that the quality of decision making for technological change can only be enhanced by an appreciation of its systemic nature. The book therefore has a practical utility as well as the academic function of increasing understanding.