Technological Change
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Technology causes changes in societies.
Improving existing technologies and creating new ones are key parts of technological
change.
A new creation is termed an invention and innovation is the step to make that creation
better. Innovation is significant in determining the market leader of a particular product.
From the stone age till the present time, technology has affected the methods of
production.
Technological change has led to increased productivity and efficiency.
The cost of production has decreased over time due to technological change.
In many cases, technological change has helped in promoting competition in the market.
Additional Infos:
 Value-judgment lens, in which we view technical progress as an important factor in
increasing economic welfare. For example, setting up new factories can increase the
carbon footprint, air pollution, and water pollution, but it can also create new employment
opportunities and make decent contributions to the economic sector. If setting up a new
factory contributes to economic welfare, people often forget the negative consequences
that comes with it.
 Second lens is not welfare-driven. It views technical progress as simply using scientific and
engineering knowledge to produce efficient goods. For example, producing efficient and
environmentally friendly cars.
 The computer was a breakthrough invention. Though there were questions on its
application, and it could only perform simple calculations, it paved the way for future
innovations.
 Efficient ways of farming were introduced such as the application of chemical fertilizers, the
use of machinery, and the development of new seeds. As for the industrial revolution,
factory production became a common practice. It was heavily energy-dependent.
Therefore, factories were moved to areas where the supply of water and coal was
guaranteed.
 Due to technological progress, steel replaced iron in manufacturing in the nineteenth
century. At the time, steel was used for setting up railway infrastructures, which eventually
changed the transport system. This revolution was a catalyst for development in the
twentieth century.
Examples:
 Automobiles, smartphones, laptops, and wind turbines are some examples of technological
changes.
Three Sources of Technological Change:
1. Research and development (within the industry).
2. Learning by doing (putting R&D into practice).
3. Spillover from other industries (direct or indirect knowledge from other industries conducting
research and working on related tasks).
How has Technology Changed?
 The tasks that used to look difficult are now easily achievable due to technological progress.
From the abundance of knowledge available at fingertips to machines that ensure more
productivity. Technology has made lives easier.
What is the process of Technological Change?
 Invention: creating something new. Innovation: finding ways to utilize and improve the
inventions. Diffusion: the spread of the inventions and innovations in society.