Technoscan

How can we visualize technological progress as it occurs across the entire technological landscape?

The macro-framework that is most convenient for this purpose is the functionality grid. It groups technologies in terms of their functionality – i.e., their ability to transform physical reality. Nine functionalities are differentiated. These are depicted below.

The functionality grid offers theorists a most convenient format for analyzing technological progress:

• It offers a way of classifying trends in FPMs
• It can be used to trace historical trends in technological progress
• It provides a format for structuring a technology outlook

How do we observe and measure improvements in individual technological entities?

A convenient approach is to make use of functional performance metrics (FPMs). These express improvements in functional performance. FPMs can be calculated for individual devices, for classes of devices, or for groups of devices working together as systems. FPMs are well known to technology analysts and are studied extensively. They are frequently referred to as technology performance metrics (TPMs). Because they can be quantified, FPMs can be graphed over time. They reflect trends in technological progress.

Improvements in functional performance are captured in terms of three major trends, the so-called triple trends of technological progress:

• Do more with less
• Take less time while doing so
• Use less space in the process

For each technological entity, and for homogenous groups of entities, these trends are reflected in:

• Improvements in the ratio of physical outputs to inputs
• Improvements in the ratio of physical outputs to time required
• Improvements in the ratio of physical outputs to space required

These improvements in physical ratios cause improvemensts in TFP at the macro level, are reflected in postive values of ∆T/T, and help explain overall economic growth.

To enable researchers to focus on technology, they sought clarification of three issues:

• What is technology?
• How is it manifested?
• What is its purpose?

There are many definitions of technology. For the purpose of this analysis we define it as competence, created by people, and expressed in devices, procedures and human skill. The basic unit of analysis is an individual technological entity. It is defined as a unique combination of devices, procedures and skills.

The purpose of technology is the provision of functionality. Functionality is the ability to transform physical reality. Physical reality is composed of three constituents; matter (M), energy (E) and information (I).

To examine the relationship between technological progress and economic growth, we have to probe the link between improvements in technological entities and ∆T/T.

In the next two postings we deal with the following:

• How can we measure progress in individual technological entities?
• How can we visualize progress in the entire technological landscape?

According to one macro-economic model, the growth in TFP can be quantified using the following expression:

• ∆Y/Y = a∆L/L + b∆K/K + ∆T/T

Where:

• Y = GDP
• L = Labor
• K = Capital
• T = Total factor productivity (TFP)
• a and b = parameters that weigh the contribution of L and K

In this model it is possible to find time series data for Y, L and K, and to infer values for a and b. ∆T/T is then calculated as a residual. Typically ∆T/T accounts for between 40% and 60% of ∆Y/Y.  TFP is, therefore, an important element in overall economic growth.

As useful as this insight may be, it is of limited value in assessing the true impact of technological progress. In addition to the impact of technological progress the residual also reflects the impact of other subtle influences, and of errors in calculation. Some observers called it a “measure of our ignorance”.

In general, economists came to the conclusion that “we have reached a dead end”. They had not succeeded in making the link between technological progress and economic growth visible. More work was needed.