Professor Rosenberg and the Direction of Technological Change: A Comment

Abstract

In a recent article Professor Nathan Rosenberg attempted a historical reconnaissance mission in search for mechanism of induced technical change.' His search for an inducement mechanism was prompted by a valid dissatisfaction with recent literature, stemming from Salter, which he accepted as demolishing older Hicksian conclusion that changes in relative factor prices induce innovation designed to economize in use of factor which has become relatively expensive. Rosenberg is clearly on solid ground in his view that a theory of induced innovation is essential to an understanding of process of technical change. His theory of cumulative sequences clearly has merit. It is argued in this note, however, that in his search for a new theory of induced innovation he accepted too readily criticism of earlier Hicks position. Rosenberg generalized from a number of historical examples that innovative efforts of entrepreneurs are so directed as to ease the most restrictive constraint on their operation.2 This is a conclusion one can hardly argue against. However, his argument that restrictive constraints or bottlenecks in business operations force entrepreneurs to focus their attention because it is the compelling and obvious need is open to