Industrial Revolution and Technology

Whether it was mechanical inventions or new ways of doing old things, innovations powered the Industrial Revolution.

Social Studies, World History

Steam Engine Queens Mill

The use of steam-powered machines in cotton production pushed Britain’s economic development from 1750 to 1850. Built more than 100 years ago, this steam engine still powers the Queens Mill textile factory in Burnley, England, United Kingdom.

Photograph by Ashley Cooper

The use of steam-powered machines in cotton production pushed Britain’s economic development from 1750 to 1850. Built more than 100 years ago, this steam engine still powers the Queens Mill textile factory in Burnley, England, United Kingdom.

It has been said that the Industrial Revolution was the most profound revolution in human history, because of its sweeping impact on people’s daily lives. The term “industrial revolution” is a succinct catchphrase to describe a historical period, starting in 18th-century Great Britain, where the pace of change appeared to speed up. This acceleration in the processes of technical innovation brought about an array of new tools and machines. It also involved more subtle practical improvements in various fields affecting labor, production, and resource use. The word “technology” (which derives from the Greek word techne , meaning art or craft) encompasses both of these dimensions of innovation. The technological revolution, and that sense of ever-quickening change, began much earlier than the 18th century and has continued all the way to the present day. Perhaps what was most unique about the Industrial Revolution was its merger of technology with industry. Key inventions and innovations served to shape virtually every existing sector of human activity along industrial lines, while also creating many new industries. The following are some key examples of the forces driving change. Agriculture Western European farming methods had been improving gradually over the centuries. Several factors came together in 18th-century Britain to bring about a substantial increase in agricultural productivity. These included new types of equipment, such as the seed drill developed by Jethro Tull around 1701. Progress was also made in crop rotation and land use, soil health, development of new crop varieties, and animal husbandry . The result was a sustained increase in yields, capable of feeding a rapidly growing population with improved nutrition. The combination of factors also brought about a shift toward large-scale commercial farming, a trend that continued into the 19th century and later. Poorer peasants had a harder time making ends meet through traditional subsistence farming. The enclosure movement, which converted common-use pasture land into private property, contributed to this trend toward market-oriented agriculture. A great many rural workers and families were forced by circumstance to migrate to the cities to become industrial laborers. Energy Deforestation in England had led to a shortage of wood for lumber and fuel starting in the 16th century. The country’s transition to coal as a principal energy source was more or less complete by the end of the 17th century. The mining and distribution of coal set in motion some of the dynamics that led to Britain’s industrialization. The coal-fired steam engine was in many respects the decisive technology of the Industrial Revolution. Steam power was first applied to pump water out of coal mines. For centuries, windmills had been employed in the Netherlands for the roughly similar operation of draining low-lying flood plains. Wind was, and is, a readily available and renewable energy source, but its irregularity was considered a drawback. Water power was a more popular energy source for grinding grain and other types of mill work in most of preindustrial Europe. By the last quarter of the 18th century, however, thanks to the work of the Scottish engineer James Watt and his business partner Matthew Boulton, steam engines achieved a high level of efficiency and versatility in their design. They swiftly became the standard power supply for British, and, later, European industry. The steam engine turned the wheels of mechanized factory production. Its emergence freed manufacturers from the need to locate their factories on or near sources of water power. Large enterprises began to concentrate in rapidly growing industrial cities. Metallurgy In this time-honored craft, Britain’s wood shortage necessitated a switch from wood charcoal to coke, a coal product, in the smelting process. The substitute fuel eventually proved highly beneficial for iron production. Experimentation led to some other advances in metallurgical methods during the 18th century. For example, a certain type of furnace that separated the coal and kept it from contaminating the metal, and a process of “puddling” or stirring the molten iron, both made it possible to produce larger amounts of wrought iron. Wrought iron is more malleable than cast iron and therefore more suitable for fabricating machinery and other heavy industrial applications. Textiles The production of fabrics, especially cotton, was fundamental to Britain’s economic development between 1750 and 1850. Those are the years historians commonly use to bracket the Industrial Revolution. In this period, the organization of cotton production shifted from a small-scale cottage industry, in which rural families performed spinning and weaving tasks in their homes, to a large, mechanized, factory-based industry. The boom in productivity began with a few technical devices, including the spinning jenny, spinning mule, and power loom. First human, then water, and finally steam power were applied to operate power looms, carding machines, and other specialized equipment. Another well-known innovation was the cotton gin, invented in the United States in 1793. This device spurred an increase in cotton cultivation and export from U.S. slave states, a key British supplier. Chemicals This industry arose partly in response to the demand for improved bleaching solutions for cotton and other manufactured textiles. Other chemical research was motivated by the quest for artificial dyes, explosives, solvents , fertilizers, and medicines, including pharmaceuticals. In the second half of the 19th century, Germany became the world’s leader in industrial chemistry. Transportation Concurrent with the increased output of agricultural produce and manufactured goods arose the need for more efficient means of delivering these products to market. The first efforts toward this end in Europe involved constructing improved overland roads. Canals were dug in both Europe and North America to create maritime corridors between existing waterways. Steam engines were recognized as useful in locomotion, resulting in the emergence of the steamboat in the early 19th century. High-pressure steam engines also powered railroad locomotives, which operated in Britain after 1825. Railways spread rapidly across Europe and North America, extending to Asia in the latter half of the 19th century. Railroads became one of the world’s leading industries as they expanded the frontiers of industrial society.

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Work and Technological Change

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Work and Technological Change

1 What is a Technological Revolution?

  • Published: October 2020
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Almost daily we are told how some new technology will revolutionize in our lives. The truth of the matter is most technologies do not. However, occasionally a new technology does appear which provides the grounding for gradual changes that eventually transform our systems of production and the way we live our lives. Historically, we speak of these developments as technological revolutions. By focusing on how such technologies change the nature of work, occupational structures, and systems of production, this chapter attempts to answer two questions: “What is a technological revolution?” and, more importantly, “How do current technologies associated with artificial intelligence fit into the history of technological change?”

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National Academies Press: OpenBook

Globalization of Technology: International Perspectives (1988)

Chapter: the technology revolution and the restructuring of the global economy, the technology revolution and the restructuring of the global economy.

UMBERTO COLOMBO

T HE WORLD IS IN THE THROES OF A TECHNOLOGICAL REVOLUTION that differs from the periodic waves of technical change that have marked the progress of industrial society since its origins 200 years ago. A shift is occurring in the sociotechnological paradigm that underlies our current sophisticated industrial structure. This old paradigm consists of the mass production of essentially standardized goods in ever-larger units; an emphasis on quantitative goals for production, requiring ever higher inputs of capital, energy, and raw materials to produce more and more; and little attention to environmental impact, resource use, and conservation issues. In contrast, the new paradigm taking shape is identified with an emphasis on quality and diversification of products and processes, diffusion of small but highly productive units that rely on new technologies and are linked to a process of decentralization of production, adoption of process and product choices requiring far less energy and materials input per unit of output, and a greater awareness of the need to preserve the quality of local and global environments.

Thus, we are in a period of transition between two epochs, a time comparable to the industrial revolution, when the steam engine was introduced and coal was the emerging energy source. Then, as now, there was widespread fear of the future, a fear derived from the difficulty of even imagining the range of opportunities that an ongoing revolution brings in terms of new activities and related jobs.

During a transition of this magnitude, past equilibria are disrupted and conditions of mismatch occur in labor markets. The demand for new jobs and skills increases, and old activities disappear or lose their importance in the marketplace. These changes are visible; their impact is almost immediate. It is now clear that the paper-free office is going to be widespread in a few

decades, and in fact, we can see its beginnings with increased office automation, the spread of word processors, and the adoption of integrated workstations. The human-free factory is also in sight. With increasing automation and robotization, it is not only blue-collar jobs that will be eliminated. The change is more profound. We are witnessing the sharpened decline of the factory as the primary function and chief labor-absorber in industry. Research and development (R&D), marketing, finance, corporate strategy, legal affairs—functions that previously were to a certain extent ancillary to production—are assuming the center of the stage. Now manufacturing itself becomes ancillary and often even a candidate for contracting out.

This does not mean, however, that manufacturing technologies are becoming secondary in importance. The contrary is true, and here, too, history offers a parallel. Today’s situation presents an analogy with the position of agriculture after the industrial revolution. All through the history of industrial society, agriculture improved its output and productivity enormously, although it no longer dominated the economy and was not the main source of jobs as it once had been. Industry will repeat this pattern, as the transition to a postindustrial, service-oriented society is completed.

The present era of change is being brought about by a whole cluster of technologies, some of which have an exceptional capacity for horizontal diffusion in all sectors of the economy and society and an equally exceptional capacity for cross-fertilization. Key technologies in this category include the microelectronics-information technologies complex, the biotechnologies, and the new materials science.

This process of technological change spurs structural changes in the economy and society. Mature sectors (such as machine tools and textiles) can be rejuvenated by grafting new technologies onto their processes and products. When this rejuvenation occurs in industrialized countries, these traditional sectors take the lead in international competition. Italy is a case in point, since Italian prosperity is in no small measure due to the restored competitiveness of such sectors. These sectors demonstrate a highly flexible approach to production, making possible less standardized products specifically designed to satisfy the tastes and needs of customers. They also demonstrate considerable creativity through attention to design factors and closer links to the market and its fluctuations, attentiveness to moods and fashions with highly imaginative marketing, and a capacity to absorb new technology and indeed to interact with it to generate improvements and adaptations.

The fact that in Italy these sectors tend to consist of dynamic, small- to medium-size firms organized in industrial districts is extremely important. Such districts operate as coalitions of competitors, interdependent yet united by a common goal. This pattern encourages the diffusion of technology through all firms in the district. This is in marked contrast to experience elsewhere when competing firms tend to keep technological advances closely

to themselves in the hope of retaining competitive advantage. Ideally, rejuvenation of mature sectors is a “bottom up” process, though in Italy, for example, the European Nuclear Energy Agency offers a significant “top down” contribution in terms of information, expertise, support research and development, and project management.

Mature sectors that undergo such technological renewal and then strive continually to keep abreast of technological developments and market trends can retain competitiveness even in the face of increasing international competition. This pattern is one of the elements suggesting that long-established concepts of comparative advantage and ensuing international division of labor must be challenged. In today’s new economic environment, the availability of abundant, low-cost raw materials and a pool of cheap labor is no longer enough to ensure market advantage to developing countries. But the emerging technologies are not the exclusive domain of advanced countries, and their intelligent application in developing countries may speed up their economic growth and open possibilities for decentralized patterns of development.

Until recently in the advanced countries, the main technological innovations in production have involved mass production and standardization. The emerging technologies make it possible to give an effective answer to the demand for diversification, product customization, and personalization. Thus, the structure of supply is becoming more flexible and innovative. In other words, it is now possible to combine small-scale production units with high productivity and high quality efficiently at increasingly accessible prices. We may therefore say that small becomes beautiful again, although not in the sense that E.F.Schumacher used this phrase in the early 1970s.

The pace of innovation is extremely rapid. No individual firm or country can hope to gain or retain technological and market superiority in any given area for long. The pressure of competition and the rapid spread of production capabilities, innovative ideas, and new patterns of demand compel companies to measure themselves against rival firms at home and abroad early in the production cycle, and then rapidly exploit, in the widest possible market, any competitive advantages that arise from a lead in innovation.

We are witnessing a compression of the time scale by which new technology is introduced, with ever-shorter intervals between discovery and application. This compression is especially apparent in microelectronics and the information technologies, sectors in which international competition and academic and industrial research activities are intense. This phenomenon is widely visible though not universal. In some sectors (specifically, though not exclusively, those involving the life sciences) longer periods are imposed by the need for testing to satisfy regulatory criteria. Examples here come from the pharmaceutical and agrochemical industries.

Simultaneously, firms acquire more strategic space in which to operate. In the past, the smaller the firm, the narrower its natural geographic horizon.

Today it is possible for both large and small firms to think in global terms. This new perspective implies the need for all interests, large and small, to seek arrangements such as transnational mergers, joint venture agreements, consortia, and shared production and licensing agreements with other companies. The partners often bring complementary assets: investment capital, market shares in different geographic areas, technological capabilities in adjacent domains, and different strategic approaches to advance innovation. In this way returns in different countries can be maximized rapidly. This worldwide change is being spearheaded by the industrial democracies—the countries that possess major resources in science and technology, innovative capability, and investment capital.

Today’s technology is becoming more and more scientific. Not only is it created and developed on scientific bases, but it also generates fundamental scientific knowledge. The discovery of new superconducting materials, for example, is simultaneously a great scientific achievement that implies fundamental advances in our understanding of the behavior of matter in the solid state and a technological invention that is immediately open to extraordinary applications in many fields, from energy transmission to computers and from high-field magnets to nuclear fusion. The development of artificial intelligence is another example of the increasingly scientific nature of technology; this effort requires the cooperation of the most disparate disciplines and in turn holds the potential for application in a wide variety of fields. These examples illustrate how the narrow, specialized, compartmentalized ways in which problems typically were approached in the past are giving way to a more global approach that breaks down the barriers of single disciplines to obtain a unified, cross-disciplinary vision.

Another unique aspect of the present technological revolution is that it brings about a dematerialization of society. In a sense, dematerialization is the logical outcome of an advanced economy in which material needs are substantially saturated. Throughout history there has been a direct correlation between increases in gross domestic product and consumption of raw materials and energy. This is no longer automatically the case. In today’s advanced and affluent societies, each successive increment in per capita income is linked to an ever-smaller rise in quantities of raw materials and energy used. According to estimates by the International Monetary Fund, the amount of industrial raw materials needed for one unit of industrial production is now no more than two-fifths of what it was in 1900, and this decline is accelerating. Thus, Japan, for example, in 1984 consumed only 60 percent of the raw materials required for the same volume of industrial output in 1973.

The reason for this phenomenon is basically twofold. Increases in consumption tend to be concentrated on goods that have a high degree of value added, goods that contain a great deal of technology and design rather than

raw materials, and nonmaterial goods such as tourism, leisure activities, and financial services. In addition, today’s technology is developing products whose performance in fulfilling desired functions is reaching unprecedented levels. For example, it is now possible to invent new energy sources that have energy densities far exceeding those of raw materials. One kilogram of uranium can produce the same amount of energy as 13 U.S. tons of oil or 19 U.S. tons of coal, and in telecommunications 1 ton of copper wire can now be replaced by a mere 25 or so kilograms of fiberglass cable, which can be produced with only 5 percent of the energy needed to produce the copper wire it replaces. Decoupling of the amount of raw material needed for a given unit of economic output, income generation, and consumption of raw materials and energy is an essential element in the dematerialization process.

But present trends go beyond this. Dematerialization also includes the emergence of what has been called an “information society.” The speed of information flow and its impact on the rate of innovation and diffusion and the capacity to overcome barriers have enormous implications.

World society is becoming more open; interdependence is increasing. World trade in goods and services has reached $3 trillion. This is certainly a high figure, but surprisingly, it is more than an order of magnitude lower than the volume of foreign currency transactions ($35 trillion) and of the estimated annual turnover of the London financial market alone ($75 trillion, or 25 times greater than the entire world’s visible trade). This is part of what is increasingly being termed the globalization of business and finance.

The comparison between the various forms of trade and transactions is, however, a matter of concern. It might be an indication that conditions for profit increasingly are more favorable in financial speculation than in capital investment in a world that still greatly needs economic growth and opportunities for employment. The alarming indebtedness of developing countries and the massive transfer of resources to advanced economies in interest payments are another facet of this problem.

But globalization affects all sectors of the economy. As noted earlier, the present wave of innovation, technological and otherwise, is spearheaded by the industrial democracies: the countries of North America, Western Europe, and Japan. Kenichi Ohmae (1985) refers to this as the emergence of the “triad,” and advocates a strategy of cross-cultural alliances in the industrial and business communities that will allow innovative companies from the three corners of the triad to become real powers, thus shaping a new pattern of global competition.

In this context, protectionism and defensive attitudes are losing bets. It is not by chance that even a superpower—the USSR—that had built barriers around itself and was striving to compete and advance by planning its economy in isolation is now being forced to come to terms with this new reality

and open up to the opportunities afforded by technological change. The implications of Gorbachev’s new course for the organization of Soviet society are immense, and the bureaucratic resistance to change is likely to be tough. In the largest developing country—the People’s Republic of China—a similar process is taking place, demonstrating that the new advances present immediate opportunities not only for already industrialized countries but for all nations.

In considering the triad, it is important to note that each of its three cornerstones faces problems. The United States retains its lead in the creation and development of the more important emergent technologies, and signs are that it will continue to do so for some time. But the size of the federal budget deficit and the size of the trade deficit, as well as the process of deindustrialization in many traditional sectors that were once the powerhouse of the U.S. economy, are surely causes for concern.

Japan is exceptionally good at exploiting the new technologies and creating large-scale applications for diverse markets. Yet the Japanese, too, are seriously worried, as can be deduced from Japanese reports calling for improved economic and scientific strategies. There are several reasons for their apprehension. Their economic success has been built on an excessive dependence on exports. Profits have been reinvested in industry at home, and the resulting overcapacity has spurred in a vicious circle the need for an even better performance abroad. Given the Japanese people’s high propensity to save, the domestic economy is finding it increasingly difficult to consume the income they generate. Meanwhile, the Japanese government’s inability to redress the country’s chronic balance of payments surplus leads to recurrent threats of retaliation from exasperated, less competitive trading partners.

The yen/dollar exchange rate implies that Japan has the highest per capita income in the world, yet few would deny that the living standards of ordinary people do not reflect this fact. Part of the production capacity devoted to promotion of exports needs to be switched to expansion of social infrastructures and improvement in the quality of life. The housing stock, the environment, and infrastructures in the less favored regions are all in need of upgrading.

With an economy long oriented toward “creative copying” and finding applications for advances achieved elsewhere, Japan admits a lack of individual creativity among its people, especially in the basic sciences. This is a by-product of a culture and an education system that instill virtues of obedience and teamwork rather than initiative and individualism. The future of Japanese technology must be based on independent effort in fundamental research and not on the import of technology from more advanced countries, as during the century-long process of catching up that began with the Meiji Restoration. Savings and consumption patterns will have to alter. All this is likely to mean major changes in the education system, a new role for the

young in what has been a traditionally hierarchical society, and wider opportunities for women (still a significantly smaller part of the labor force in Japan than in any other industrialized country).

Western Europe, on the other hand, appears less oriented toward the future. On the whole, the economies of Western European countries are less concentrated on advanced sectors and are more balanced in their strengths. High-tech sectors are not the most aggressive elements in their economies, even though some of these sectors constitute areas of strength—nuclear energy, aerospace, and robotics. Overall, Europe is too weak in certain critical areas of microelectronics and information technology—for example, in basic electronic components, very-large-scale integration technology, and supercomputers. The most negative aspects of the situation in Europe are a lack of cohesion in many emergent sectors, inadequate infrastructures, and a dispersed and fragmented market.

Europe’s cultural heritage, its deep-rooted traditions in the arts and craftsmanship, and the availability of welfare provisions—care and assistance for the individual citizen, typical of the “welfare state”—are equally distinctive characteristics. They give European nations an edge over the United States and Japan in applying new technologies to traditional industrial and services sectors and in creating diversified, personalized products in response to market needs. Productivity of labor has risen in Europe, although to the detriment of full employment, and so has product and process flexibility. Europe’s reputation for quality products is being maintained increasingly through the adoption and adaptation of new technologies in their production.

Globalization is moving faster than the long-heralded political and economic unification of Europe. Global competition came about suddenly, and it caught Europe off guard. These two unifying processes—on the one hand, the European Economic Community (EEC) and, on the other, the global economy—are now developing side by side; in some areas they are competing. Where the European firm is an acknowledged leader in an advanced sector, these processes run in tandem; where the reverse is true, European considerations tend to take second place.

Many European firms are seriously at risk of being left behind in this competition by becoming the weak link in the triad, a link that provides ideas, labor, services, and markets but essentially leaves strategic initiatives to their U.S. and Japanese partners. Europe is a divided continent and, considering only the EEC, an uneasy mix of old, established, industrialized countries and others in which rural cultures and outlooks still prevail. Policies to pump subsidies into ailing agriculture, declining industrial sectors, and overstretched nonmarket services such as public sector health care, road and rail networks, postal services, and primary and secondary education—Europe’s first response to the economic crises of the 1970s—are proving difficult to remove.

Basic scientific research is still in good shape in Europe, and individual scientists and relatively small, high-level research groups produce excellent results. The few large, cohesive research teams that were created in Europe in certain areas of scientific research, such as the European Organization for Nuclear Research (CERN) in high-energy physics, are highly competitive. Europe even occupies a leading position in some important industrial sectors: precision machine tools, electronic instrumentation, pharmaceuticals, and fine chemicals. In general, however, European industry still tends to think in terms of closed markets with the survival, wherever possible, of producer cartels. Public procurement policies remain largely at the level of single nations; this is a serious obstacle to a more active, relevant role in the world economy. There are, however, heartening signs that Europe is becoming more aware of its weaknesses in this area. Initiatives in science and technology are being undertaken at the EEC level and, separately, in the ambit of the so-called EUREKA program of coordinated, transnational research and development in advanced sectors.

An interdependent and more open world society will lend itself best to the challenge of innovation. The world needs much more material growth; the world population has reached 5 billion and will increase to 8 billion in 2050 before it stabilizes at something under 10 billion. The increase will take place almost entirely in the Third World. A quarter of the world’s population now inhabits today’s industrialized countries, but this proportion will fall to less than 20 percent in 50 years. The inhabitants of industrialized countries already consume three-quarters of the world’s energy and mineral resources. It is difficult to imagine that disparity on this scale can continue far into the next century.

It is essential for world society that the existing gap between North and South be narrowed. This narrowing should be seen not only as a moral obligation for prosperous nations but also as in their own long-term interest. Development in the Third World will create areas of complementary production that will expand and broaden the international economy. This will, in turn, generate new markets for tradable goods and services, thus replacing today’s frenetic paper market in financial instruments. If present trends continue, this market is bound to increase the disparity between the rich and the poor in the world and hamper investment in industry and other productive activities.

Patterns of development for the Third World need not follow those set by today’s industrial economies. Available new technologies (for example, in agriculture, rural industrialization, and education and for the delivery of services) make it possible to achieve a more balanced growth without the exaggerated and disorderly urbanization and subsequent unemployment and other social ills now occurring in much of the Third World.

In this optimistic vision of the future, multinational enterprises are very

important, but not in the traditional sense. Globalization will be increasingly linked to innovation. Furthermore, many small and medium-sized multinational corporations will emerge, relying on alliances that draw on the experience and information available to partners in each market in which the alliances operate. The role of government will not diminish. This role will not necessarily be antagonistic but will provide overall strategic direction, infrastructure, monitoring of conditions for fair competition, and preservation of cultural heritage and environmental quality.

Thus, the availability of abundant raw materials and cheap labor are no longer key factors for success in the world market. New technologies restore vitality to certain sectors in industrialized countries, sectors that were hitherto viewed as almost certain candidates for relocation to the Third World. At the same time, developing countries now have available to them a whole set of new technologies that lend themselves to blending with traditional technologies and thereby make faster development possible across the board.

Those developing countries endowed with raw materials and energy may convert them into more valuable commodities, but unless they are able to master the technology needed to upgrade such commodities, they will derive little benefit from this primary transformation. Emphasis must therefore be placed on research and development and enhanced international cooperation, because it is not in the interest of advanced countries to keep the developing countries’ margins so low as to hamper their advancement and preclude their becoming healthy producers and active market forces. Whether this happens depends largely on the wealthier societies of North America, Western Europe, and Japan. Responsibility therefore lies with them.

Ohmae, K. 1985. Triad Power: The Coming Shape of Global Competition. New York: Free Press.

The technological revolution has reached around the world, with important consequences for business, government, and the labor market. Computer-aided design, telecommunications, and other developments are allowing small players to compete with traditional giants in manufacturing and other fields. In this volume, 16 engineering and industrial experts representing eight countries discuss the growth of technological advances and their impact on specific industries and regions of the world. From various perspectives, these distinguished commentators describe the practical aspects of technology's reach into business and trade.

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Essay on Rise of Technology

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The advent of technology.

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In education, technology has revolutionized learning. It made information accessible to everyone, promoting a more inclusive learning environment.

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The advent of the technological era, accelerating pace of innovation.

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500 Words Essay on Rise of Technology

The dawn of the digital age.

The rise of technology has been a defining characteristic of the 21st century. It is an era marked by rapid technological advancements, which have transformed every aspect of our lives, from communication to transportation, education, healthcare, and entertainment.

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Technology and communication.

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Technology and Education

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The flip side of technology.

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The rise of technology has undoubtedly been transformative, impacting every facet of our lives. While it has brought numerous benefits, it has also raised several challenges. As we continue to embrace technology, it is crucial to address these challenges and ensure that technology serves as a tool for progress and prosperity, rather than a source of disparity and discontent. The future of technology is promising, and its potential is immense. However, it is up to us to harness this potential responsibly and sustainably.

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  • Darby, S. J. (2017). Smart technology in the home: time for more clarity. Building Research & Information, 46(1), 140–147.
  • Khan, A. A., Rehmani, M. H., & Rachedi, A. (2017). Cognitive-Radio-Based Internet of Things : Applications, Architectures, Spectrum Related Functionalities, and Future Research Directions. IEEE Wireless Communications, 24(3), 17–25.

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Technological Revolutions and the Role of the State in the Governance of Digital Technologies

This essay is part of Global Cooperation on Digital Governance and the Geoeconomics of New Technologies in a Multi-polar World.

Introduction

The view that the role of the state in the economy is constant over time clashes with reality. Usually, those who perceive the state’s economic role as static espouse a theoretical view that states should intervene as little as possible in markets, except to correct occasional “market failures” in order to allocate resources efficiently. From a historical perspective, this constant, hands-off governmental 1 approach is apocryphal. What can be observed is a changing role of the state, which varies with the cyclical surges of technological change as well as of geopolitical (and ideological) inclinations. This conference paper discusses the former: how the role of the state changes along the life cycle of a technological revolution while also taking into account the latter.

Several scholars propose different ways to conceptualize the evolution of technical change in terms of technological or industrial eras. One approach is to contrast the technological developments since the eighteenth century, which came to define our current era of “industrial modernity” with the ways that society organized itself and the economy in the preceding (mostly) agrarian era (Brynjolfsson and McAfee 2014; Schot and Kanger 2018). Another approach does not see the post-Industrial Revolution period as monolithic but identifies successive “long waves” of industrial or technological “revolutions” (Perez 2002; Schwab 2016, viii). These revolutions would follow distinctive and recurrent patterns of emergence, diffusion and consolidation, yet creating unique impacts on established structures (Perez 2002). Schot and Kanger (2018) provide a periodization that actually could be seen as a bridge between both approaches: in their view, the several technological revolutions of the past three centuries represent a first “deep transition” (from the agrarian era to industrial modernity) and we would be witnessing, due to a wave of breakthrough renewable energy technologies and green innovations (powered by disruptive digital technologies), the emergence of a second deep transition — this time, from industrial modernity to sustainable post-modernity. Despite their distinct perspectives on the cyclical nature of capitalist technological development, these authors tend to agree that the wave of digital innovation from the past 40 years has created challenges and opportunities — for incumbent firms, industries, regions and whole nations — posing new demands for the role of the state, particularly in relation to the governance of disruptive digital technologies.

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My discussion of the role of the state is based on the periodization of technological revolutions proposed by Perez (2002) because of its comprehensiveness, level of conceptual detail and coherence, which provides a compelling picture of the long-term dynamics of capitalist technological development. Working in the neo-Schumpeterian long-wave (or Kondratiev cycle 2 ) tradition, Perez (ibid.) identifies five technological revolutions, each triggering “great surges of development” (GSD) (see Table 1): “the process by which a technological revolution and its paradigm [ 3 ] propagate across the economy, leading to structural changes in production, distribution, communication and consumption as well as to profound and qualitative changes in society” (ibid., 15). Perez (ibid.) sees the emergence and diffusion of each GSD as divided into two: initially, the emergence of a new revolution is led by financial capital, while, in the second half of the process, diffusion of the revolutionary innovations is promoted by the state (I will return to and detail this conceptualization in the section titled “The Perezian Techno-economic Cycle”).

Table 1: Five Great Surges of Growth and Five Major Technology Bubbles

Penna_Table1.png

The second conceptual anchoring for the discussion of the role of the state in the process of technological development is the notion of a “double movement” in capitalism, proposed by Polanyi (2001): the idea that contradictory forces govern capitalist development in a dialectical process (Fiori 2004). One force is based on liberalizing principles that promote the expansion of free markets; the other is based on social self-protection principles that keep this expansion constantly in check to protect society from the “ravages of this [free market] satanic mill” (Polanyi 2001, 73). While such forces are always in operation, they come to the fore and subside in different historical moments, so that Polanyi’s double movement can also be interpreted as a secular pendulum (Kretschmer 2019; Nölke and May 2019; Stewart 2010). Perez’s (2002) theory seems consistent with Polanyi’s double movement: indeed, I will argue that Perez (ibid.) offers an explanation of Polanyi’s political-economic double movement in terms of technological dynamics.

Against this background, I shall discuss two interrelated propositions:

  • From a Polanyian perspective, since the 2000s, the world has moved toward a period of a proactive role of the state, most visible in the level of political and policy discourse (but also increasingly put into action).
  • From a Perezian perspective, this new proactive role calls for specific regulations and investments to address technological externalities and social inequalities caused by and associated with the digital technologies of the fifth technological revolution (which is yet to be put into action).

The conference paper 4 is structured around these two propositions (sections titled “The Polanyian Pendulum” and “The Perezian Techno-economic cycle,” respectively), and concludes with a discussion of the implications for the prospects of global cooperation on digital governance.

The Polanyian Pendulum

Karl Polanyi (2001, 3–4) introduces his thesis of a capitalist “double movement” in the beginning of the first chapter of The Great Transformation : “Our thesis is that the idea of a self-adjusting market implied a stark Utopia. Such an institution could not exist for any length of time without annihilating the human and natural substance of society; it would have physically destroyed man and transformed his surroundings into a wilderness. Inevitably, society took measures to protect itself, but whatever measures it took impaired the self-regulation of the market, disorganized industrial life, and thus endangered society in yet another way.”

Only in chapter 8 does Polanyi refer to this dynamic as a double movement and, later, in chapter 11, he explains that whenever “the market expands itself continuously […] this movement [is] met by a countermovement checking the expansion in definite directions” (ibid., 130). Polanyi’s double movement represents a constant dialectical process: “the two principles have material and social roots that coexist in a necessary, permanent and contradictory way within capitalism” (Fiori 2004, 60 [my translation]). Indeed, in the history of capitalism, the state was and is responsible for establishing rights and duties that define the limits of the free market (Chang 2002). The liberal market itself is embedded in social, political and cultural institutions (Granovetter 1985) that define its boundaries of free action, such as law and public order, execution of contracts, property rights, public goods, conditions of business conduct and economic regulations. Polanyi (2001, 140) is adamant that even in England, the cradle of capitalism, the free-market economy (what the author calls “ laissez-faire economy”) was produced by the deliberate action of the state: “The road to the free market was opened and kept open by an enormous increase in continuous, centrally organized and controlled interventionism.”

The capitalist double movement is often also interpreted as a secular pendulum, an idea that is rooted in Polanyi’s insight that “various countries of a widely dissimilar political and ideological configuration...each…passed through a period of free trade and laissez-faire , followed by a period of antiliberal legislation in regard to public health, factory conditions, municipal trading, social insurance, shipping subsidies, public utilities, trade associations, and so on. It would be easy to produce a regular calendar setting out the years in which analogous changes occurred in the various countries” (ibid., 147). This insight resulted in a stream of research that sought to identify the periods of laissez faire and the periods of interventionism. While the specific dates differ, the periods seem largely to coincide. Drawing on Burawoy (2010), Kretschmer (2019), Nölke and May (2019), and Stewart (2010), a periodization can be established for the Polanyian pendulum between the late eighteenth century and the early twenty-first century (Figure 1). Of course, the dates are approximate, because the forces are always in operation (it is a dialectical process), each slowly moving to the foreground or to the background (until certain events may catapult one or the other to prominence).

Figure 1: The Swings of the Polanyian Pendulum

PfPC_Penna_Figure1-01.png

While the identification of the first three periods of “social self-protection” and of laissez faire are based on an interpretation of those works, here I propose that the fourth period of social self-protection has started somewhen around 2010, or after the global financial crisis (GFC) of 2007–2008. To be sure, this “new swing of the Polanyian pendulum” is discussed by other authors, such as Fiori (2004) and Kaldor (2018), who discuss a new “realist” period in the geopolitical dynamics. In this conference paper, I will, however, concentrate on the role of the state in the technological process and, therefore, in terms of innovation (and industrial) policy and regulation.

In Penna (2021), I argued that the coronavirus disease 2019 (COVID-19) pandemic magnified those interrelated geopolitical and techno-economic trends, claiming that:

  • The manufacturing global value chains overly dependent on China would eventually be a central target of national policy, which would aim at making the country’s economy less dependent on Chinese imports.
  • Upgrading industrial structures and reshoring of value chains would become “the flavour of the month” in the policy makers’ menu of measures, i.e., a return to active industrial policy.
  • Industrial and innovation policies would increasingly be “mission-oriented” (Mazzucato and Penna 2015), i.e., aimed not only at seizing technological opportunities associated with the new wave of disruptive digital technologies, but also at contributing to the solution of urgent societal challenges (such as mitigating climate change or caring for an aging population).
  • As a consequence of the US-China technological and geopolitical competition, the policy space for multilateral governance of digital technologies would be diminished.

These speculations were a logical conclusion from the observed empirical trends (while also explained from the theoretical perspective of political economy). The new activist role of the state in innovation and technological policy is most visible in the policy discourse, as indicated by the number of governmental publications discussing how to ascertain “technological sovereignty” and make economies and value chains more resilient, while also focusing industrial and innovation strategies on the achievement of missions (Figure 2). 5

Governmental attention to industrial policy seems to have increased substantively in the aftermath of the GFC, reaching a peak in 2019, which is likely to be surpassed in 2021. Mission-oriented innovation policy received an impetus in 2018, which coincided with the publication of the European Commission’s “Mazzucato Report” (Mazzucato 2018). The catalyst effect of the COVID-19 pandemic seems most evident in the case of governmental attention to “technological sovereignty,” which was not mentioned in governmental documents in the Overton database before 2014 (except for one European Parliamentary Research Service report in 2011 on the impact of the GFC on European defence).

Figure 2: Government Documents Citing Technological Sovereignty, Mission-Oriented Research and Innovation, and Industrial Policy (2000–2021)

PfPC_Penna_Figure 2-01.png

Concern with technological sovereignty at the EU level predates the pandemic (which is visible in Figure 1) and was triggered in 2019 by European Commission President (then elected) Ursula von der Leyen, who made the issue a priority in her presidential term (Cunningham 2020). Such prioritization of technological sovereignty will likely continue when France takes over the rotating presidency of the European Commission in January 2022, given French President Emmanuel Macron’s recent declarations (Macron, quoted in Kayali 2021) 6 on the need to ensure Europe’s “digital” and “technological” sovereignty. Macron also announced in October 2021 France’s own €30 billion technological and industrial plan to ensure the country’s domination of digital, robotic and genetic technologies. On the other side of the Atlantic, US President Joe Biden’s industrial and infrastructure plan can also be seen as a techno-economic sovereignty strategy that seeks to ensure the United States has the “most resilient, innovative economy in the world.” 7 Both the (French and US) plans are also “mission oriented,” as they seek to address climate change and other societal challenges.

These political discourses and policy plans expose a tension between the interests and strategies of different countries in terms of technological sovereignty, while revealing a new approach to the role of the state in the innovation process. This tension was evident in the beginning of the COVID-19 pandemic, when countries were holding back medical supplies for themselves: from China (O’Keeffe, Lin and Xiao 2020) 8 restricting exports of masks and other medical goods, to the United States supposedly “hijacking” (Ankel 2020; O Globo 2020) medical equipment shipped to third countries through US territory. These episodes show that, when a crisis looms, the actions of national governments suddenly become “realist” and any traces of the “liberal” international relations’ 9 rhetoric disappear: the nation-state and the interests and welfare of their citizens become the privileged frame of reference. But beyond the rhetoric of the political discourse and the action of active investments in new industries and technologies, what is the new role of the state in the governance and regulation of digital technologies? To address this question, we look at the Perezian techno-economic cycle (Perez 2002).

The Perezian Techno-economic Cycle

Perez (ibid., 36) calls the first half of the GSD the “installation period,...when the new technologies irrupt in a maturing economy and advance like a bulldozer disrupting the established fabric and articulating new industrial networks, setting up new infrastructures and spreading new and superior ways of doing things”; and the second half “the deployment period,...when the fabric of the whole economy is rewoven and reshaped by the modernizing power of the triumphant paradigm, which then becomes normal best practice, enabling the full unfolding of its wealth generating potential.”

Based on a historical analysis of the five surges, she further argues that, on the one hand, installation is led by financial capital, which thrives in free markets, while, on the other hand, deployment is promoted through state activism that supports production capital. This is the reason why the role of the state changes alongside a technological revolution: from a non-interventionist approach to the economy, facilitating entrepreneurial experimentation fuelled by financial capital, to a proactive leading role, promoting institutional change and investments to regulate negative externalities caused by new technologies, addressing inequalities and income polarization, and further supporting technological diffusion. Toward the end of a GSD, the role of the state becomes entrepreneurial itself, with public investments creating the very inventions that provide a fertile soil for the private entrepreneurial activity that will trigger the next technological revolution and GSD. This is the “entrepreneurial state” that Mazzucato (2013) talks about. What Perez does is to offer an explanation of the political-economic double movement identified by Polanyi that is linked to technological dynamics.

From the Perezian perspective, the new role of the state calls for an active approach to promote institutional changes (new laws and regulations), in order to address technological externalities and social inequalities caused by and associated with the digital technologies of the fifth technological revolution (or GSD). Or, to put it in a Polanyian “language”: to protect society from the ravages of the free-market “satanic mill.” In the fourth GSD — that of the automobile and mass production — the institutional recomposition and state activism started with then US president Franklin Roosevelt’s New Deal and, more crucially, with the new financial architecture provided by the Bretton Woods system. (The European reconstruction initiative known as the “Marshall Plan” can also be seen as part of this process, as can the developmental policies of Latin American and Asian countries).

In the fourth GSD, taming the externalities of the paradigm-carrying US automobile industry — the industrial sector that produces and disseminates the core technological innovation of the revolution, and thus establishes the “best practice” principles (i.e., the techno-economic paradigm) — required the establishment of new laws, which culminated with, for example, the US National Traffic and Motor Vehicle Safety Act of 1966, which established mandatory safety standards for automobiles, and the US Clean Air Act of 1970, which mandated that automobiles would have to comply with stringent emission levels for carbon monoxide, nitrogen oxides and hydrocarbons (Penna 2014). These laws established a new technological governance framework that further underscored the proactive role of the state in the second half of the fourth technological revolution (i.e., from the 1940s to the 1970s). It is such a technological governance framework that is absent from the current pro-state rhetoric, which mostly focuses on governance and regulatory aspects to assure technological sovereignty (with the notable exception of the case of data privacy 10 ).

Conclusion: Implications for Global Governance of Digital Technologies

Nowadays, the widespread diffusion of digital technologies is bringing about negative externalities in the form of disruption of established structures (work relations, business models, trade patterns). This potential disruption calls for a realignment of institutions and the establishment of a new governance system. Digital technologies result in many different types of issues, each creating a new demand for technological governance (Instituto Euvaldo Lodi et al. 2017):

  • ethical (for example, the right to privacy and data confidentiality);
  • proprietary (for example, ownership and access to data);
  • industrial design (for example, the degree of autonomy of machines, which could become an issue of economic and political power);
  • normative (for example, the establishment of open versus proprietary standards and of technical standards for tracking decisions, securing compatibility and retrofitting legacy systems);
  • techno-economic (for example, support for the development of technical and organizational skills adapted to each production system); and
  • socio-environmental (for example, rising unemployment due to robotization or the disposal of digital equipment, supplies and goods).

All such problems call for a new regulatory role of the state, and some of them may not be amenable to national regulations — they need a global framework if the problems are to be effectively addressed. Former US president Donald Trump’s discourse of distrust over the action and mandates of existing multilateral institutions (and threat to leave the World Health Organization and World Trade Organization) was at odds with the prospects of international agreements in the regulation of the digital economy. While it is expected that Biden will resort to a cooperative rhetoric, this benevolent discourse will likely disguise real action to safeguard the interests of the United States.

As I discuss in the section titled “The Polanyian Pendulum,” the current scenario is defined by increased realism in international relations, whereby nation-states will increasingly act to guarantee their own (economic, political, technological) sovereignty. The US-China technological and geopolitical competition that came to the fore of the global stage in the Barack Obama era and became most evident (until now) during the Trump years already indicated a diminishing policy space for multilateral governance of digital technologies (Penna 2021). The Annual Security Policy Forecast for 2021 by the Austrian Ministry of National Defence makes a scenario assessment that concludes that “the global strategic environment is moving towards deterioration into a fragmented, confrontational international environment with decreasing possibilities of steering at the global and regional levels” (Richter 2021, 55). Indeed, in this scenario, multilateralism tends “to assert the interests of the apparently benevolent liberal US hegemon” (Jedlaucnik 2021, 67).

In terms of digital technologies governance, what may be seen is a dispute between competing technological standards at the global level, for instance, for fifth-generation telecommunications technologies, but also for blockchain standards, data protection regulations or Internet of Things, for example. While a technological-standard tug of war between the United States and China is obvious, with the former trying to ascertain its techno-industrial prowess (and keep its status as technological leader) and the latter trying to advance its techno-industrial capabilities (and go beyond its status as the world’s manufacturing powerhouse to challenge the US technological leadership), we may also see the emergence of a European way for technological governance of digital technologies.

It was during the twentieth-century Cold War between the United States and the Soviet Union that the world witnessed the “golden age” of capitalism — a period of widespread global welfare that Perez (2002) sees as a possibility for every second half of a technological revolution, as long as there is an adequate institutional framework to address the issues created in its first half. Thus, it could well be that during the current swing of the Polanyian pendulum we see a new global golden age. Yet, for that to happen, the role of national states will have to go beyond assuring narrowly defined technological sovereignty plans and promote a new institutional architecture that addresses the negative consequences of technologies and the socioeconomic inequalities at the global level.

  • Despite important conceptual differences between “state” and “government” (and their derivations), I will use them as synonyms throughout this conference paper (unless otherwise specified).
  • It was Joseph Schumpeter who named these capitalist cycles after Russian economist Nikolai Kondratiev, who identified, based on statistical data, long-term periods of high economic growth followed by periods of relatively slow growth.
  • Perez (2002) refers to a “techno-economic paradigm” as the best-practice principles of how to apply the technological revolution to continuously innovate or modernize the whole economy.
  • The conference paper synthesizes and expands on the discussions in Penna (2021, forthcoming 2021).
  • This section draws on the analysis in Penna (forthcoming 2021), which used the following search queries in the Overton database ( https://app.overton.io ): for technological sovereignty documents, (“technological sovereignty”); for value chain and industrial policy, (“industrial policy” and “value chain” or “supply chain”); for mission-oriented innovation policy, (“mission-oriented innovation” or “mission oriented research” or “mission oriented policy”). I restricted results to “government” as type source (excluding, for example, documents by policy think tanks). Overton claims to be “the world’s largest collection of policy documents, parliamentary transcripts, government guidance and think tank research.” While it is not expected to be complete, particularly for earlier years, it can provide an indication of governmental attention to certain topics in recent periods, which is the intended use here.
  • See also Browne (2020).
  • Quoted in www.nytimes.com/2021/03/31/business/economy/biden-infrastructure-plan.html . See also Atlantic Council (2021).
  • See Bradsher and Alderman (2020).
  • On the different schools of international relations, see Snyder (2004).
  • There is a parallel between the regulation of the externalities from the automobile and those from the digital technologies, which is discussed in Penna (2021). It is interesting that corporate scandals (for example, General Motors spying on consumer activist Ralph Nader and the “antitrust case of the century,” which showed that the American Big Three auto firms General Motors, Ford and Chrysler conspired not to develop emission-control technologies ahead of each other) played an important role in influencing public opinion in favour of the establishment of those regulations. Whether the latest Facebook “scandal” (Duffy 2021) will play such a role in the establishment of an online privacy and safety regulatory framework is yet to be seen.

Works Cited

Ankel, Sophia. 2020. “At least 5 countries — including a small Caribbean island — are accusing the US of blocking or taking medical equipment they need to fight the coronavirus.” Insider, April 7. www.businessinsider.com/coronavirus-us-accused-of-diverting-medical-equipment-from-countries-2020-4 .

Atlantic Council. 2021. “The Biden White House plan for a new US industrial policy.” Atlantic Council, June 23. www.atlanticcouncil.org/commentary/transcript/the-biden-white-house-plan-for-a-new-us-industrial-policy/ .

Bradsher, Keith and Liz Alderman. 2020. “The World Needs Masks. China Makes Them, but Has Been Hoarding Them.” The New York Times , March 13. www.nytimes.com/2020/03/13/business/masks-china-coronavirus.html .

Browne, Ryan. 2020. “France’s Macron lays out a vision for European ‘digital sovereignty.’” CNBC, December 8. www.cnbc.com/2020/12/08/frances-macron-lays-out-a-vision-for-european-digital-sovereignty.html .

Brynjolfsson, Erik and Andrew McAfee. 2014. The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies. New York, NY: W. W. Norton & Company.

Burawoy, Michael. 2010 “From Polanyi to Pollyanna: The False Optimism of Global Labor Studies.” Global Labour Journal 1 (2): 301–13.

Chang, Ha-Joon. 2002. “Breaking the Mould: An Institutionalist Political Economy Alternative to the Neoliberal Theory of the Market and the State.” Cambridge Journal of Economics (26): 539–59.

Cunningham, Francine. 2020. “European Commission unveils regulatory plan to achieve ‘technological sovereignty.’” Bird & Bird, February. www.twobirds.com/en/news/articles/2020/global/european-commission-unveils-regulatory-plan-to-achieve-technological-sovereignty .

Duffy, Clare. 2021. “The Facebook Papers may be the biggest crisis in the company’s history.” CNN, October 25. https://edition.cnn.com/2021/10/25/tech/facebook-papers/index.html .

Fiori, José Luís. 2004. “Formação, Expansão e Limites do Poder Global.” In O Poder Americano , edited by José Luís Fiori, 11–64. Petrópolis: Editora Vozes.

Granovetter, Mark. 1985. “Economic Action and Social Structure: The Problem of Embeddedness.” American Journal of Sociology 91 (3): 481–510.

Instituto Euvaldo Lodi. 2017. “Nota Técnica: Etapa I do Projeto Indústria 2027 – Mapa de Clusters Tecnológicos e Tecnologias Relevantes para Competitividade de Sistemas Produtivos.” Projeto Indústria 2027: riscos e oportunidades para o Brasil diante de inovações disruptivas. Brazil: Instituto Euvaldo Lodi.

Jedlaucnik, Herwig. 2021. “Die global-liberale Ordnung der USA.” In Sicher. Und morgen? Sicherheitspolitische Jahresvorschau 2021 , edited by Bundesministerium für Landesverteidigung, 62–7. Vienna, Austria: Bundesministerium für Landesverteidigung.

Kaldor, Mary. 2018. “Cycles in World Politics.” International Studies Review 20 (2): 214–22.

Kayali, Laura. 2021. “Macron aims for 10 European tech giants valued at €100B by 2030.” Politico , June 15. www.politico.eu/article/macron-aims-for-10-european-tech-giants-valued-at-e100b-by-2030/ .

Kretschmer, Mark. 2019. “Karl Polanyi and economics: Polanyi’s pendulum in economic science.” Ordnungspolitische Diskurse No. 2019-04.

Mazzucato, Mariana. 2013. The Entrepreneurial State: Debunking the Public vs. Private Myth in Risk and Innovation. London, UK: Anthem Press.

———. 2018. Mission-Oriented Research & Innovation in the European Union: A problem-solving approach to fuel innovation-led growth. Brussels, Belgium: European Commission.

Mazzucato, Mariana and Caetano C. R. Penna, eds. 2015. Mission-Oriented Finance for Innovation: New Ideas for Investment-Led Growth. London, UK: Rowman & Littlefield International.

Nölke, Andreas and Christian May. 2019. “Liberal Versus Organised Capitalism: A Historical-Comparative Perspective.” In Market Liberalism and Economic Patriotism in the Capitalist World-System , edited by Tamás Gerőcs and Miklós Szanyi, 21–42 . Cham, Switzerland: Springer International.

O Globo . 2020. “Carga chinesa com 600 respiradores artificiais é retida nos EUA e não será enviada ao Brasil.” O Globo , April 3. https://oglobo.globo.com/brasil/carga-chinesa-com-600-respiradores-artificiais-retida-nos-eua-nao-sera-enviada-ao-brasil-24349142 .

O’Keeffe, Kate, Liza Lin and Eva Xiao. 2020. “China’s Export Restrictions Strand Medical Goods U.S. Needs to Fight Coronavirus, State Department Says.” The Wall Street Journal , April 16. www.wsj.com/articles/chinas-export-restrictions-strand-medical-goods-u-s-needs-to-fight-coronavirus-state-department-says-11587031203 .

Penna, Caetano C. R. 2014. “The Co-evolution of Societal Issues, Technologies and Industry Regimes: Three Case Studies of the American Automobile Industry.” Ph.D. thesis, University of Sussex.

———. 2021. “Geopolitics and the Economics of Innovation: Different Strategies.” CEBRI Policy Paper 2/5.

———. Forthcoming 2021. “A ‘New’ Political Economy of Technological Innovation Strategies in the Post-Pandemic World?” CEBRI Policy Paper.

Perez, Carlota. 2002. Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages. Cheltenham, UK: Edward Elgar.

Polanyi, Karl. 2001. The Great Transformation: The Political and Economic Origins of Our Time . Boston, MA: Beacon Press.

Richter, Bernhard. 2021. “Umfeldszenarien 2035.” In Sicher. Und morgen? Sicherheitspolitische Jahresvorschau 2021, edited by Bundesministerium für Landesverteidigung, 50–56. Vienna, Austria: Bundesministerium für Landesverteidigung.

Schot, J. and Kanger, L. 2018. “Deep transitions: Emergence, acceleration, stabilization and directionality.” Research Policy 47 (6): 1045–59.

Schwab, Klaus. 2016. The Fourth Industrial Revolution. New York, NY: Crown Business.

Snyder, Jack. 2004. “One World, Rival Theories.” Foreign Policy , October 26. https://foreignpolicy.com/2009/10/26/one-world-rival-theories/ .

Stewart, Frances. 2010. “Power and Progress: The Swing of the Pendulum.” Journal of Human Development and Capabilities 11 (3): 371–95.

Originally published by the Project for Peaceful Competition .

The opinions expressed in this article/multimedia are those of the author(s) and do not necessarily reflect the views of CIGI or its Board of Directors.

Global Cooperation on Digital Governance and the Geoeconomics of New Technologies in a Multi-polar World

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The Emergence of Color Television: a Technological Revolution

This essay is about the emergence and impact of color television. It highlights the key milestones in the development of color TV, starting with CBS’s demonstration in 1950 and the approval of the NTSC color standard in 1953. The essay discusses the introduction of the first commercially available color TV set, the RCA CT-100, in 1954, and the gradual adoption of color television in the 1950s and 1960s. It also covers the widespread adoption of color TV in the mid-1960s, the influence on popular culture and advertising, and the global expansion of color broadcasts. Overall, the essay underscores the technological advancements and cultural significance of color television.

How it works

The commencement of color television denotes a momentous juncture in the annals of broadcast media, fundamentally reshaping the manner in which audiences interacted with visual content. Despite the enduring allure of monochromatic television since the latter years of the 1920s, the introduction of color TV heralded a novel realm of authenticity and exhilaration to the viewing experience. However, the precise inception of this technological marvel beckons scrutiny.

The odyssey towards color television unfolded as a convoluted and gradual evolution, underscored by a series of innovations and competitive endeavors among prominent industry stakeholders.

The inaugural public exhibition of a color television system transpired on January 12, 1950, when CBS (Columbia Broadcasting System) unveiled its field-sequential color system. This pioneering system, engineered by Peter Goldmark, harnessed a rotating color wheel to generate chromatic images. Nevertheless, the CBS system grappled with notable constraints, including incompatibility with extant monochromatic sets and mechanical intricacies, which impeded its widespread adoption.

The veritable breakthrough in color television materialized in 1953 when the National Television System Committee (NTSC) sanctioned a novel color broadcasting norm. Diverging from the CBS paradigm, the NTSC standard seamlessly interfaced with prevailing monochromatic television sets, rendering it more pragmatic for mass assimilation. The NTSC color system embraced a methodology recognized as “compatible color,” enabling color broadcasts to be perceived in monochrome on older sets. This pivotal innovation facilitated a seamless transition to color television for consumers and broadcasters alike.

The inaugural commercially accessible color television set, the RCA CT-100, made its debut on the market in April 1954. Priced at approximately $1,000, a substantial sum at the time, the CT-100 boasted a 15-inch display with vibrant, albeit sometimes imperfect, color replication. RCA’s promotional endeavors and the gradual augmentation of color programming helped propel consumer interest, although the adoption of color TV initially progressed at a sluggish pace. Many consumers evinced reluctance to invest in the new technology due to its exorbitant cost and the limited availability of color broadcasts.

Throughout the 1950s and 1960s, color television underwent continual evolution, with technological advancements and cost reductions bolstering its burgeoning appeal. Prominent networks such as NBC and CBS commenced augmenting their color programming, with NBC famously broadcasting the Tournament of Roses Parade in color on January 1, 1954. This seminal event is frequently cited as one of the earliest significant color broadcasts that captivated public attention.

The widespread embrace of color television gained momentum in the 1960s as more economically accessible color sets entered the market and the volume of color programming expanded. By the mid-1960s, color television transcended its status as a luxury item and evolved into a mainstream household staple. The 1965-1966 television season represented a pivotal juncture, as all three major networks in the United States – NBC, CBS, and ABC – pledged to broadcast a substantial portion of their prime-time programming in color.

The transition to color television extended beyond the confines of the United States. Various nations, including the United Kingdom, Canada, and Japan, also made significant strides in adopting color broadcasting standards. The United Kingdom, for instance, witnessed its inaugural color broadcast on July 1, 1967, when the BBC aired the Wimbledon tennis tournament in color. This landmark event heralded the advent of regular color transmissions in the UK, further cementing color television as a global phenomenon.

The impact of color television on popular culture and society was profound. It revolutionized the consumption of media, rendering television programs more immersive and visually captivating. Color television exerted a significant influence on advertising, as marketers harnessed vibrant hues to craft more compelling commercials. The allure of color prompted viewers to upgrade their sets, contributing to the expansion of the consumer electronics industry.

In conclusion, the emergence of color television represented a transformative milestone in the annals of broadcast media, propelled by technological innovation and competitive industry endeavors. The trajectory from initial exhibitions to widespread assimilation spanned over a decade, punctuated by notable milestones. The introduction of the NTSC standard in 1953 and the release of the RCA CT-100 in 1954 constituted pivotal moments that set the stage for the color revolution. By the mid-1960s, color television had metamorphosed into an omnipresent feature in households worldwide, enriching the viewing experience and leaving an indelible imprint on popular culture.

It is important to note that this essay serves as a springboard for inspiration and further exploration. For personalized assistance and assurance that your essay aligns with all academic standards, consider consulting professionals at EduBirdie.

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  • The exponential growth of solar power will change the world

An energy-rich future is within reach

The sun at dawn rising over a solar panel

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I t is 70 years since AT&T ’s Bell Labs unveiled a new technology for turning sunlight into power. The phone company hoped it could replace the batteries that run equipment in out-of-the-way places. It also realised that powering devices with light alone showed how science could make the future seem wonderful; hence a press event at which sunshine kept a toy Ferris wheel spinning round and round.

Today solar power is long past the toy phase. Panels now occupy an area around half that of Wales, and this year they will provide the world with about 6% of its electricity—which is almost three times as much electrical energy as America consumed back in 1954. Yet this historic growth is only the second-most-remarkable thing about the rise of solar power. The most remarkable is that it is nowhere near over.

To call solar power’s rise exponential is not hyperbole, but a statement of fact. Installed solar capacity doubles roughly every three years, and so grows ten-fold each decade. Such sustained growth is seldom seen in anything that matters. That makes it hard for people to get their heads round what is going on. When it was a tenth of its current size ten years ago, solar power was still seen as marginal even by experts who knew how fast it had grown. The next ten-fold increase will be equivalent to multiplying the world’s entire fleet of nuclear reactors by eight in less than the time it typically takes to build just a single one of them.

Solar cells will in all likelihood be the single biggest source of electrical power on the planet by the mid 2030s. By the 2040s they may be the largest source not just of electricity but of all energy. On current trends, the all-in cost of the electricity they produce promises to be less than half as expensive as the cheapest available today. This will not stop climate change, but could slow it a lot faster. Much of the world—including Africa , where 600m people still cannot light their homes—will begin to feel energy-rich. That feeling will be a new and transformational one for humankind.

To grasp that this is not some environmentalist fever dream, consider solar economics. As the cumulative production of a manufactured good increases, costs go down. As costs go down, demand goes up. As demand goes up, production increases—and costs go down further. This cannot go on for ever; production, demand or both always become constrained. In earlier energy transitions—from wood to coal, coal to oil or oil to gas—the efficiency of extraction grew, but it was eventually offset by the cost of finding ever more fuel.

As our essay this week explains, solar power faces no such constraint. The resources needed to produce solar cells and plant them on solar farms are silicon-rich sand, sunny places and human ingenuity, all three of which are abundant. Making cells also takes energy, but solar power is fast making that abundant, too. As for demand, it is both huge and elastic—if you make electricity cheaper, people will find uses for it. The result is that, in contrast to earlier energy sources, solar power has routinely become cheaper and will continue to do so.

Other constraints do exist. Given people’s proclivity for living outside daylight hours, solar power needs to be complemented with storage and supplemented by other technologies. Heavy industry and aviation and freight have been hard to electrify. Fortunately, these problems may be solved as batteries and fuels created by electrolysis gradually become cheaper.

Another worry is that the vast majority of the world’s solar panels, and almost all the purified silicon from which they are made, come from China. Its solar industry is highly competitive, heavily subsidised and is outstripping current demand—quite an achievement given all the solar capacity China is installing within its own borders. This means that Chinese capacity is big enough to keep the expansion going for years to come, even if some of the companies involved go to the wall and some investment dries up.

In the long run, a world in which more energy is generated without the oil and gas that come from unstable or unfriendly parts of the world will be more dependable. Still, although the Chinese Communist Party cannot rig the price of sunlight as OPEC tries to rig that of oil, the fact that a vital industry resides in a single hostile country is worrying.

It is a concern that America feels keenly, which is why it has put tariffs on Chinese solar equipment. However, because almost all the demand for solar panels still lies in the future, the rest of the world will have plenty of scope to get into the market. America’s adoption of solar energy could be frustrated by a pro-fossil-fuel Trump presidency, but only temporarily and painfully. It could equally be enhanced if America released pent up demand, by making it easier to install panels on homes and to join the grid—the country has a terawatt of new solar capacity waiting to be connected. Carbon prices would help, just as they did in the switch from coal to gas in the European Union.

The aim should be for the virtuous circle of solar-power production to turn as fast as possible. That is because it offers the prize of cheaper energy. The benefits start with a boost to productivity. Anything that people use energy for today will cost less—and that includes pretty much everything. Then come the things cheap energy will make possible. People who could never afford to will start lighting their houses or driving a car. Cheap energy can purify water, and even desalinate it. It can drive the hungry machinery of artificial intelligence. It can make billions of homes and offices more bearable in summers that will, for decades to come, be getting hotter.

But it is the things that nobody has yet thought of that will be most consequential. In its radical abundance, cheaper energy will free the imagination, setting tiny Ferris wheels of the mind spinning with excitement and new possibilities.

This week marks the summer solstice in the northern hemisphere. The Sun rising to its highest point in the sky will in decades to come shine down on a world where nobody need go without the blessings of electricity and where the access to energy invigorates all those it touches. ■

For subscribers only: to see how we design each week’s cover, sign up to our weekly  Cover Story newsletter .

This article appeared in the Leaders section of the print edition under the headline “The solar age”

Leaders June 22nd 2024

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War and AI

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Artificial Intelligence And Jobs: No Signs Of Worker Fear And Loathing

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Workers want to join the AI revolution

The common theme we’ve been hearing from all quarters in recent times is artificial intelligence is the job-killer, accompanied by scary headlines. “ AI is going to eliminate way more jobs than anyone realizes ,” screamed a headline in Business Insider last August. “ AI is replacing human tasks faster than you think ,” CNN recently blared. Everywhere are lists of jobs AI is or will soon be replacing, such as this dour piece from MSN: “ 24 Careers AI Might Take Over: Will Your Job Survive?” “While your job may be safe for now, there’s no guarantee you’ll be set for the future,” the author gloomily predicts.

However, it appears workers didn’t get the memo — or pile of memos. In recent surveys, there is scant evidence of fear and loathing among the workers who may see their jobs shift as AI looms greater on the scene. Most workers, in fact, seem pleased that AI will be assisting them in their pursuits.

For example, a new survey of 6,000 employees by Salesforce finds 77% of today's workers trust AI, and even want AI to do almost half of their work tasks. Leading categories for trust in completely autonomous work tasks include writing code (trusted by 15%), uncovering data insights (13%), and drafting written communications (12%), and acting as a personal assistant (12%).

Likewise, only five percent of 150,735 workers responding to a survey out of Boston Consulting Group expressed fear that AI would eliminate their jobs. On the other hand, 25% expected no impact on their jobs, and another 49% said AI may change some tasks.

A majority of 56,600 workers surveyed by PwC also expect a positive impact from AI as well. At least 31% anticipate that AI will increase their productivity and efficiency, while 21% expect AI to create new job opportunities.

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Workers today already trust AI to do roughly 43% of their work tasks, the Salesforce survey shows. Close to eight in ten, 77%, of workers will eventually trust AI to operate autonomously. Ten percent even trust autonomous AI today, while 26% will trust autonomous AI in less than three years.

Nearly 40% of employees use generative AI tools regularly, the BCG survey observes. They do not fear generative AI, either — most say that they will need help to understand what skills to build.

Trust is the key. Workers want to be involved in the process of rolling out AI to fulfill tasks. At least 63% seek to have more say over AI implementation decisions, the Salesforce survey shows. At issue is the fact that 54% say they do not know how AI is implemented or governed in their workplace. Training may be another key to trusted autonomy: 62% of workers say more skill-building and training opportunities would build their trust in AI.

Workers who currently use generative AI do so for simple activities such as research, administration, and translation, BCG finds — “uses that are akin to replacing Google with genAI,” the survey’s authors observe.

Workers using generative AI the most frequently are leveraging it for their core work tasks, not just for general administrative work and research, the BCG authors add. “Personal GenAI applications most often involve finding facts and gaining general knowledge (40%), developing skills and learning (38%), or translating material from other languages (33%).”

Outside of the workplace, people are using generative AI a career advancement or job-search tool, using it to develop résumés and cover letters, for example.

Joe McKendrick

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The AI Revolution: Opportunities and Challenges for Internal Audit to Leverage and Audit AI

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Technological Change in the Industrial Revolution Essay

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Introduction

Solow analysis, impact of technology and innovation on lifestyle.

Technological change has been an important element of the global economy and much of it has been characterized by the development of microprocessors, microcomputers, and automated production processes.

Technological revolution specifically started during the industrial revolution, through the transformation of the traditional workplaces, leading to the creation of new types of work environments. The industrial revolution can be best analyzed through dramatic changes that happened in nearly all aspects of the British society (Cipolla 1994, p. 2).

A significant portion of these changes was however felt in aspects such as social structures/institutions, demographics and politics but the growth of factories was the primary manifestation of the technological revolution (Cipolla 1994, p. 2). As a result, population was skewed on development grounds, with major British cities experiencing population growths of nearly 100% while the number of towns grew even more (Cipolla 1994, p. 2).

For example, the cities of England and Wales only had about 20 cities in the 1800s, but by the close of the century, there were about 200 cities registered in the countries (Cipolla 1994, p. 4). Just to sample the impact technological changes had on the general demographical patterns of England and Wales, a technological invention to improve the smelting of Coke saw the shift in population growth from the South and East to the West and the North (Cipolla 1994, p. 7).

Technological change can also be termed as the root of the capitalistic system of operation we witness today because the people who were in a position to control the means of production, back in the day, got very wealthy while those who did not; became subjects of the rich.

Also, from the improvement of the technological landscape, the total income per household more than doubled and consequently, the national Gross domestic product (GDP)increased by a significant margin, within a ten decade period (Cipolla 1994, p. 3). This shift in wealth also brought a change on the world’s political landscape because industrial capitalists took over positions previously held by agrarian capitalists (Cipolla 1994, p. 2).

However, even amid the wealth creation (brought about by the technological change), there were numerous concerns of workers’ safety in the factories because, often, there was congestion in the factories and all manner of people including children and women were allowed to work with minimal or no safety measures taken to guarantee their safety in the workplaces.

At the same time, the workers were usually paid minimal wages which also brought about devastation to the people because most workers could only afford basic needs, thereby leading to the emergence of slums. This kind of “crazy” factory life became the topic of most literature writers then, because textile factories, mines and factories were marred with the worst industrial human working conditions probably seen in the history of mankind (Cipolla 1994, p. 12).

However, later on, conditions improved with the passing of laws to protect workers and more especially, the women and children from adverse working conditions. This progression also saw the development of the first trade unions to advocate for the rights of workers. Comprehensively, the technological change in the world led to the development of more global industries and the establishment of Britain as the world’s superpower, for more than a century.

This study seeks to establish how technological change affected the production function in the industrial revolution; with a special emphasis on aspects such as the overall production output, and the resultant influence on capital and labor employed. In addition, this study will categorize the impact of technological development both at the firm level and the macroeconomic level. Lastly, this analysis will be done through Solow analysis alongside the comprehension of firms’ economic behavior.

Technological revolution greatly changed the way production was normally undertaken in the industrial period. Specifically, technology increased the efficiency of production, made the final goods cheaper, and reduced the time taken to make goods.

In this regard, technological developments had an impact on the short-run curves of production, thereby increasing the units which could have otherwise been produced solely from human labor. With the increase in production units, variable costs (costs which vary with the level of production) are likely to reduce whereas fixed costs are bound to have better utility in the production process because they will be spread over the increased production units. Consequently, average fixed costs are also likely to reduce.

The decreased average costs of production are often characterized by the displacement of human labor for machinery, but modern-day representation of the phenomenon is best illustrated through the displacement of human labor in the assembly of motor units by robots.

With regards to human labor input, the introduction of new technology in production processes segmented the otherwise uniform labor force into skilled and unskilled labor whereas the old economy relied on both unskilled and skilled labor; however, the introduction of new technology and innovative initiatives in production processes only required skilled labor; rendering unskilled laborers jobless.

Also, the technological development brought forth an argument against unskilled labor on the basis that skilled laborers could easily furnish both skilled and unskilled labor, thereby rendering unskilled laborers redundant (Musson 1969, p. 27). This, therefore, meant that skilled laborers could move between two types of employment while unskilled laborers were stagnant in their economic sectors.

This model of analysis also exposes the income disparities brought about by the introduction of new technology because skilled laborers were paid highly while unskilled laborers got minimal pay. This also set forth the capitalistic movement in the society. The same industrial revolution example can also be compared to the mechanization of agricultural activities in the US during the 1920s period.

Initially, unskilled workers were directly employed by the agricultural economy, but since the advent of mechanized farming, most unskilled workers were eliminated from farming and the resultant situation saw only a dismal 2% of the initial workers employed in the industry (Cipolla 1994, p. 278). Conventionally, during the industrial revolution, the shift of the economy into technological advancement saw the destabilization of families due to a loss of livelihoods.

Comprehensively, it can be said that there was a sense of asymmetry in the substitution of both skilled and unskilled labor, brought about by technological change.

However, the advent of new technology was highly favorable to skilled labor, and the market equilibrium shifted at the expense of unskilled laborers because unskilled laborers experienced a lower marginal product of labor when compared to their skilled counterparts. This development brought about the decline in social welfare even though production levels improved. However, Musson (1969) notes that

“the Utility of both groups is equal; however, there is a critical threshold level productivity of the skilled workers in the new technology beyond which unskilled workers became redundant as the sector that was in favor of them was eliminated in favor of the sector using skilled workers, and it is socially optimal to eliminate the industry employing the unskilled laborers who will not be employed” (27).

With regards to the capital input needed to acquire new technology in the factories, it was quite cheap to run machineries than human labor.

The financial costs were therefore relatively affordable and most industries preferred to engage in more technological explorations to improve efficiency in the industries. Initially, most of the industrial processes were done by hand and many people had to be employed before any meaningful industrial process commenced (Cipolla 1994, p. 278). However, with the advent of technological development, machinery became valuable capital assets for industrial process.

Many industries were therefore economically socialized to set up new plants to do most of the industrial processes and consequently, this led to the increase in demand for energy to power these machines. This was the sole reason why the use of coal, firewood and water increased during the industrial revolution period and all of them became a significant part of the capital input in the industry.

However, this development should not be confused to mean that the cost of doing business increased with the advent of technology because the use of technology only signified a change in the production process; meaning there was little reliance on human labor and more reliance on machinery. When compared to the overall productivity of the industries, a relatively low cost of capital was needed to produce the same output of products when compared to situations where technology was not incorporated.

This, therefore, means that instead of using human energy to produce goods, alternative energy sources like coal were used to power machines, to do the same type of work that humans did. This marked the significant shift in capital from human capital to asset (machinery) capital accumulation. Moreover, the operational costs associated with human labor and machinery was incomparable because the price of operating machinery was much lower than maintaining human labor.

Technology, therefore, made human capital less economically viable as compared to machinery because human capital involved a lot of business risks like death in the workplace, injury, burnouts and costs such like wages and salaries. At the same time, machinery or plant assets only required maintenance or replacements, which meant lower prices of operation, increased efficiency and more output.

The revolution into technology and industrialization at one time became very widespread that a revolt started among workers to protest against the general replacement of human capital for machines. This period saw the destruction of machines and several plants in industries as workers tried to phase out the new technological changes and restore back the traditional human capital reliance.

However, this failed to work out and many industries were forced to seek the services of the police in keeping away angry workers. Many protestors were arrested, tried and hanged upon declaration of guilt. Such was the level of human capital displacement evident in the industrial revolution period.

One of the most significant technological innovations of the industrial revolution happened in the cotton industry where the cotton gin was invented to speed up the process of cotton weaving (Hooker 1996, p. 5). This invention saw an otherwise small industry bust into a robust industry throughout much of the 18 th century. Cotton was majorly produced in America and India, but a large chunk of the production process happened in Britain, and this saw the massive traffic of African salves to work in cotton factories (Hooker 1996, p. 5).

The process of shredding out the cotton to make pieces of threads for clothing was also improved by technological innovation because the spinning jenny machine was used to hasten the process; from making one thread at a time to making multiple threads at the same time. This progression also reduced the number of laborers working in the cotton industry and quite frankly, subsequent employees in other industries suffered the same fate from the progress of technological innovation (Hooker 1996, p. 6).

These technological innovations significantly reduced the prices of cotton and made their use very expansive. In the same regard, the quality of production improved because cotton was stronger than wool, thereby making the production of cotton shoot through the roofs.

In fact, by the close of the 18 th century a majority of the cotton production process was no longer being done in small scale industries because it moved to large factories, thereby changing the nature of the domestic economy; however, more significant effects of this transition were realized in the middle of the 19 th century (Hooker 1996, p. 7).

Even though the spinning engine made a lot of developments in the cotton industry, a significant portion of technological change in the industrial revolution happened with the development of the steam engine. From this technological development, essential sectors of the economy improved.

The most notable development which happened alongside the cotton industry was in the steel industry. A quirk in English geography especially made the industry develop in leaps and bounds because England was endowed with vast deposits of coal and carbon-based minerals.

The development of steam engine was facilitated by the fact that coal burned much better and longer than wood and since England had huge deposits of it, it becomes infinitely cheaper to run steam engines from it (Hooker 1996, p. 5). In the same regard, the English used this discovery to substitute the use of coal for iron smelting while other manufacturers were quickly warming up to the idea as well.

However, extracting the coal from the ground was not such an easy task because miners had to dig deep into the ground and the more they dug, the more the mines filled up with water.

At this point, the steam engine came in handy because it was used to pump water from the mines, but since it used only one piston, it was highly inefficient and used vast amounts of energy and so, no other use was appropriate except for the extraction of water (Hooker 1996, p. 5). However, with a few modifications to the structure of the steam engine, the machine could now be applied to many other industries of the time.

In reality, the invention of the steam engine changed the entire landscape of the English manufacturing industry after its adoption replaced the use of water as the major source of power in the industry. This development saw the explosion of factory-based technology-driven manufacture and the inception of the age of absolutism in the English manufacturing industry (Hooker 1996, 19).

Since much of the increase in labor productivity during the industrial revolution was attributed to technological change and innovation, an alternative form of growth accounting was needed to measure economic growth.

This entailed calculating the effective stock of capital, based on the assumption that technological development was to be sourced from new vintages associated with capital injection; for example, if technological change was 5% per annum and the elasticity of output-based in the capital injection would be 0.36; it meant that technological growth would be contributing approximately 1.8% per year (CGU 2010, p. 5).

When analyzing the capital input in economic growth during the industrial revolution, Solow notes that the capital share in the production process is constant over the period of technological development (CGU 2010, p. 1). The increase in capital per person-hour is not directly proportional to labor productivity because capital productivity only accounts for about an eighth of the total productive labor (CGU 2010, p. 2).

Solow observes that the difference is brought about by technological change. In this regard, Solow notes that the productivity of labor doubled over the industrial revolution period, but it did not only come about from a change in capital but also a change in technology. This development was specifically derived from Solow’s initiative to dissect the total Gross Domestic Product (GDP) growth in terms of the elements, which led to its increase during the industrial revolution.

This, therefore, means that analysis into the production function encompassing all the major production elements has to be done. This is in contrast to the widely held belief by many economists across the globe that social development during the industrial period was preceded by economic growth (CGU 2010, p. 8).

In close relation, the same economists also believe that labor productivity also led to the same observations; in oblivion of other macroeconomic factors which may have led to the same observation. According to Solow, these neglected economic factors included technological development, innovative initiatives and a change in the managerial system (CGU 2010, p. 1).

From an empirical point of view, assuming the aggregate production function is Q = A (t) f (K, L); where Q is the aggregate output, A (t) is a function of the time taken for technological changes to take effect and f (K, L) is a function of capital and labor, the aggregate production function should be treated as its separate entity while the other constituents of the equation should also be treated differently but with regards to time (CGU 2010, p. 2).

This development has made many economists differ on Solow’s approach; in an attempt to decompose growth with the use of more complex formulations like human capital, technological development and innovative practices; however, many other economists disagree about the fraction of economic growth which can be explained by the effect of change in technology overproduction (all parties, however, agree that this element is essential).

Solow’s analysis, therefore, provides a simple concept in which output can be analyzed through the consideration of technological and innovative inputs (CGU, 2010, p. 7)

Denison 1962 (cited in CGU 2010, p. 8) however brought another perspective to analyzing the impact of technological development on industrial revolution by identifying the fact that economies of scale were responsible for about half of the residual created by economic developments.

The sources for the residual in his point of view came from either the economies of scale or the improvement in resource allocation; meaning that the trajectory of his work was more inclined towards downsizing the contribution of technological change in the industrial revolution.

Technological changes greatly improved the type of human lifestyle characteristic of the industrial revolution and indeed even today. In the first place, technological changes brought with it the triumph of industrial economists who greatly improved the prospects of employment for the general population through the development of new mills and factories.

The living conditions also changed in the same respect because industrialists lived in splendor while lower-level citizens lived in small houses, in cramped up streets or in the emerging slums, created by the population explosion in the cities.

This development led to increased awareness of the importance of safety regulations especially in highly dense areas because, before laws to improve human living conditions were implemented, the slums used to be characterized by open sewers, poor drainage and poor sewage facilities, among other deplorable social conditions.

Chronic diseases especially affected those living in cramped up places while hunger and malnutrition greatly hit those who were not in a position to afford basic needs. This situation came to a point where diseases such as cholera, smallpox typhoid and the likes were common because water sources were contaminated and there were not enough sanitation services to curb the pandemics.

This situation became quite unfortunate especially for women and children because most of them died even before they reached the age of 25; from chest diseases and other diseases brought about by the poor working conditions in the factories they worked in.

When the industrial revolution spread from Britain and England into other countries, the life expectancy of the general population was very low; with countries such as France recording a life expectancy of 35 years; slightly above England’s but America had a life expectancy age of between 45 -50 (Musson 1969, p. 78).

However, the population was not only characterized by two extremes because, there was an existent emerging middle-class society which was largely dominated by lawyers, doctors and such like professionals. This middle-income population was majorly created by the emergence of the working class population who had a relatively good relationship with the factors of production as compared to low-income workers.

The increase in technology and innovation also rendered many people unemployed; especially those who did not have the skills to compete with skilled workers, because employment was more confined to people who could operate machines, as opposed to people who could do the work machines did. In fact, the machines could do the same amount of work hundreds of workers combined together would.

Even amid all the negative effects of technological development and industrial revolution on human lifestyle, there was an improved sense of literacy among the population, especially with the development of paper mills, which also led to the production of more resource materials like books, newspapers and the likes.

Political participation of the general population also consequently increased. The deplorable living conditions exhibited at the start of the industrial revolution were also improved and the life expectancy of children below the age of five, dramatically increased.

For instance, London reduced child mortality rates by more than half (Musson 1969, p. 78). The standards of living also greatly improved with the advent of technological development; in that, laws were passed to check humanitarian hazards in the sprawling slums and so diseases were checked and treated; sewage systems were improved and sanitation services availed. Also, as mentioned earlier, the factory working conditions were improved to match the new order.

The growth of modern cities was also facilitated by the technological growth, evident in the industrial revolution because many people migrated from rural areas to live in cities while searching for employment openings.

This led to massive urbanization which created a huge shift in the number of people living in cities and rural areas since it was estimated that only about 3% of people lived in rural areas in 1800 but by the start of the 21 st century, more than 50% of the population lived in urban centers (Musson 1969, p. 78). Comparatively, Manchester, which only had a small population of close to ten thousand people by the year 1717 dramatically saw an increase in population to record 2.3 million people by the year 1911.

During the industrial revolution, technology and innovative practices had a profound impact on the economic landscape of the United Kingdom and subsequently other countries across the globe. This period still stands as a major hallmark in human history and it was characterized by a technological touch in almost every basic level of human life.

Some of the significant socioeconomic developments could be evidenced through the tremendous increase in income and population; specifically major industrial cities experienced population explosions, but the overall household incomes of those engaged in industrial sectors increased ten-fold.

Technological development also saw the immense shift in economic makeup from an agrarian-based economy to an industrial-based economy characterized by machine-based manufacturing industries. Initially, the textile industry was the first to experience such changes, then the iron smelting industries followed, and later huge deposits of coal started to be extracted to power the machines.

The level of output production in most industrial processes was also incomparable to any other period in human history because as Solow notes, labor production increased two-fold, with a significant percentage of the production attributed to technological development and capital investments.

These developments had a significant impact on the society because not only did the population increase as well as the level of income, technological developments segregated the once heterogeneous human labor into skilled and unskilled; leading to the phenomenal migration of people from rural to urban settlements and the emergence of landmark cities with a significant sprawl of urban slums and widespread joblessness (because of the displacement of human labor for machines).

Nonetheless, technology brought about efficiency in production because human labor which was prone to human errors was avoided and the speed of operation improved, the start of the capitalistic system in the society also took root. Collectively, the technological change marked the change in production function.

CGU. (2010) Technological Change and the Aggregate Production Function . Web.

Cipolla, C. (1994) Before the Industrial Revolution: European Society and Economy, 1000-1700 . New York: Norton. Hooker, R. (1996) The European Enlightment. Web.

Musson, A. (1969) Science and Technology in the Industrial Revolution . Manchester: Manchester University Press ND.

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