Concept Of Technological Change (Tc) (Technical
The techniques of production which influence the production functions of a firm or industry are given the name of technological change, technological improvement or technical efficiency. As a result of such technical efficiency either the same good produced with the help of inputs less than earlier, or more goods and services are produced with the help of same input resources. We demonstrate the first possibility where a given amount of output can be produced with fewer inputs with the help of Fig. 1. Because of TC, we have ne production function whereby less of L and less of K are employed to produce the same level of output. The both isoquants Q and Q* represent the same quantity of output, while the input requirements have come down. The changes in technical efficiency is produced with the help of inputs less than can be produced with fewer inputs with the help of Fig. 1. Because of TC, we have newproduction function whereby less of L and
less of K are employed to produce the same level of output. The both isoquants Q and Q* represent the same quantity of output, while the input requirements have come down. The changes in technical efficiency earlier, or more goods and services are produced with the help of same input resources. We demonstrate the first possibility where a given amount of output result from inventions and innovations. By invention, Schumpeter the champion of theory of inventions and innovations means, the discovery of a new technique. While innovation means the practical application of an invention to production for the market. The inventors did the inventions. The task of innovation was made by entrepreneurs.
The economic analysis distinguishes between autonomous and induced technological change. The autonomous change represents the purest result of the exercise of idle curiosity. As some inventor makes discoveries just for sheer pleasure by sitting in some workshop or laboratory. Whereas the technological changes (discoveries) which are made to make the products more attractive and pleasing, cheaper and distinctive may be given the name of induced technological changes. In such case the necessity, perhaps, is truly the mother of invention. The systematic development of inventions and innoyations by researchers who work and research in the research units of the firms, enterprises and laboratories is given the name of technological change. Such technical changes are mostly profit motivated, if they are made in private sector. They are for the social development, if they are performed in public sector.
The technical change may lead to produce a new good yielding greater utility as the case of VCR, Refrigerators, Dish—Receiver, Video Phone, Jumbo Jet, Air-conditioners and Juicers etc.
Thus with reference to economic development by ‘technical change we ,.so the changes in the techniques of production of a firm or industry. As Joseph Schumpeter says
“Development consists primarily in employing existing resources in a different way, in doing new things with them, irrespective of whether those resources increase or not”. Therefore, the technological change comprises of inventions, innovations, new techniques of production, improvement in technical and managerial skill, and better use of resources.
Related Economics Topics
- Technological Progress and the Demand for Inputs
- Schumpeter Model Of Economic Growth
- PROCESS OF TECHNOLOGICAL CHANGE
- Trends Of Growth In Schumpeter Model
- Entrepreneurs And Economic Development