The way in which the process of technical change is formulated at the macroeconomic level implies generally speaking immediate diffusion or adoption of new technologies. Whether primarily disembodied in nature, accounting for any shift in the production function as in the early technology index formulations, or embodied in new investment as in the subsequent vintage growth models, technical progress will be identified with advances in 'inventiveness' or 'best practice' technologies. At first, this might well seem the most appropriate way to separate out the contribution of the technology production factor from the other production factors. From a straightforward economic point of view though, advances in technology or best practice productivity levels are only relevant to the extent that they have been translated in actual achieved productivity levels. The issue is a well known one in most empirical research on the measurement of the contribution of technical change to economic growth, and has received much attention in the recent productivity slowdown debate (Denison, I 979, Griliches, I980, Nordhaus, I980, and i 98I in particular). There it was generally agreed that 'other' technology factors, including a slowdown in the rate of the 'spread of technology' to use Kendrick's (i 98I) term, were more important than the actual decline in R & D expenditure, in contributing to the overall slowdown in productivity. The importance of the diffusion of innovation rather than the mere 'occurrence' of innovations is of course the major factor underlying most of the microeconomic diffusion literature. The fundamental reasons for delay in adopting the so-called retardation factors have been found to relate both to uncertainty and lack of information about the new technology and the often proprietary nature of the new technology. Since Griliches (I957) and Mansfield's (I96I) seminal papers, most of this literature has focused on the theoretical arguments underlying the traditional, S-shaped 'epidemic' diffusion curve. In more recent research, particularly, the 'mechanical', static nature of these diffusion models has been questioned and various alternative diffusion models suggested, including dynamic supply models (Metcalfe, 1981; i982; Stoneman, I983) in which both the economic characteristics of the innovation and its diffusion environment have been made endogenous to the diffusion process. These latter models in particular allow for an interpretation of the diffusion of technology in a broader macroeconomic growth and structural change perspective.
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Nov 10, 2023
Jiaohui Yu + 1
Open Access