The Economic Aspects of Science and Technology

Topics: The Economics of R and D and Technological Change, Classical Theories Of Economic Growth, Views of Technological Changes and Analyses of Growth and Development

Preview:

The effect of long-range historical

forces on science is difficult to

identify and describe in detail

Marxian framework attempts to

insert science and technology as

variables within its categories :

Socio-economic base

Superstructure

Marxian Framework

Socio-economic base

Constitute the forces of production of a

given society

Superstructure

Comprises the social relations, as well

as political and cultural manifestations.

 THEORIES:

A number of theories of technological change have been proposed by economists. Some of these theories have evolved over time by refinements of earlier theories, while others have benefited from new revelations. Adam Smith (1723-1790) recognized the role of changing technologies. According to him, improvements in production technology would emerge as a by-product of the division of labor, including the emergence of a profession of schedulers or organizers akin to modern-day engineers. A specialized worker doing the same job repetitively would tend to look for ways to save time and effort. In Smith’s world, productivity could also increase indirectly via capital accumulation.

Karl Marx’s (1818-1883) notion of the tendency of the rate of profit to fall stems from a recognition of technological change (process innovation) leading to more efficient production, and the replacement of labor with capital or machinery. Labor-saving innovation or mechanization occurs when Marx’s capitalists are unable to further lengthen the working day and therefore are unable to extract further surplus value in absolute form from labor.

Production Functions, Productivity Growth, and Biased Technological Change
The measurement of the rate and direction of technological change rests fundamentally
on the concept of the transformation function. 

Economic growth requires
structural change
Productivity growth in developed countries mainly relies on technological innovation. For developing
countries, however, growth and development are much less about pushing the technology
frontier and much more about changing the structure of production towards activities with
higher levels of productivity. Th is kind of structural change can be achieved largely by adopting
and adapting existing technologies, substituting imports and entering into world markets for
manufacturing goods and services, and through rapid accumulation of physical and human
capital. A few developing countries have been able to undertake original research and development
in some fields, but technological innovation continues to be highly concentrated in the
industrialized world.

Narrative/ Things I learned

These topics also was assigned to our group, our group decide to have power point presentation. From the discussion headed by group mate, I learned the major impact of technology in economy. The major impact are:

• As the focus becomes less global,

the social and political influences on

science become more obvious 

• The scientific community is buffeted by

the social, political, & economic

  considerations of the society in which it

is embedded.

The pace of technological change can vary across industries, firms, and countries, depending upon the resources devoted to research and the nature of products or processes pursued.

Source:

"Resources for the Future" by:  Jaffe, Newell, and Stavins