As stated earlier, technological progress is measured by improvements in FPMs. These improvements can be traced back to many sources, including technologies with higher FPMs than their predecessors. We offer four examples.
- IBM and the development of electronic computing. This led to an improvement in the FPM: Output of information (I), per unit of time (T). It was achieved by the introduction of electronic components – a new and unusual technology at the time.
- Litton and the creation of the microwave industry. This led to an improvement in the FPM: Output of matter, i.e. heated substance (M), per unit of energy (E) required. It was achieved by the use of the magnetron, a component from radar technology.
- Corning and the manufacture of optic fibers. This led to an improvement in the FPM: Output of information (I), per unit of space (S). Corning was traditionally an oven-ware company serving domestic customers and now offered information transmission technology.
- Monsanto and the development of genetically modified organisms. This led to an improvement in the FPM: Output of matter, i.e., crops (M), per unit of space (S) required. Monsanto was traditionally a bulk chemical company that now employed biologically based info-tech to create seeds with new growth characteristics.
In each case technological progress, and consequently economic growth, was achieved by applying new and unfamiliar technology in a novel and unique manner.
Can we formalize the procedures for encouraging and managing technology-based innovation? Recent advances in theory has made this easier.
We explore these in future posts.
Copyright: Rias J. van Wyk, 2009