The direction of technological change: inducement mechanisms and focusing devices

Abstract

Introduction One of the things which is perfectly obvious about societies which have achieved high degrees of industrialization is that they have acquired unusual skills in problem-solving activities. Industrial societies have learned how to solve certain kinds of problems, and understanding this creative capacity is basic to an understanding of the growth process. What is less obvious, however, is that the developed countries never solve more than a small fraction of the problems they are capable of solving. Rather, they solve some fraction of the problems which happen to be formulated and actively pursued. This suggests that our understanding of the process of technological change may be advanced by exploring the manner in which problems are formulated at the firm level. This paper is intended as a sort of historical reconnaissance mission. It represents an attempt to establish certain generalizations concerning the problem-solving process in industrializing countries in the past two centuries. Our interest is in the forces which provide inducements to technical change, and in examining these forces – what Hirschman has called “inducement mechanisms” – we will not confine ourselves to the more conventional framework of economic reasoning. Indeed, the present paper has been prompted in some measure by the extreme agnosticism to which one is led on the subject of technological change by recent theorizing. It used to be thought possible to explain the factor-saving bias, which inventions took, in purely economic terms.