Technology plays an important role in shaping the production process. In a wide sense, technology includes hardware, software, and a combination of these. It improves the efficiency of firms and facilitates the factors of production. Technology can be applied to many different kinds of industries to increase productivity and output. For example, technology can help restaurants reduce labor costs by using kiosks instead of servers.
Technological progress
Output-based technological progress bias is the tendency of a technology to increase its output when the inputs remain unchanged. This bias can affect technological progress in one of three ways. Output-biased technological change is characterized by OBTC=1, whereas input-biased technological change is characterized by OBTC=0.
One of the most important factors affecting technological progress is the level of pollution in a country. For example, technological advancement can contribute to reducing the concentration of SO2, but it cannot eliminate it altogether. Similarly, technological progress can also reduce the emission of PM2.5. Considering the above factors, a country must make sure that the technologies it uses are environmentally friendly.
Diffusion: The diffusion of technology is influenced by three factors: social setting, cultural background, and technology. Diffusion of technology follows a typical S-shaped curve, with early versions not becoming widespread but later versions of a technology are adopted widely and have a high level of acceptance. Finally, as a technology reaches its full potential in the market, its diffusion rate decreases. In the case of personal computers, the diffusion process has been extremely successful, and they have now made their way into business environments and office workstations.
Energy: The energy-intensive production of new technologies increases the demand for energy, which can lead to environmental pollution. This is due to the scale effect of technological progress, which increases production efficiency and scale. Increased energy consumption creates more pollution and is not sustainable in many cases. If technological development does not lead to a reduction in energy use, it is unlikely that it will lead to a reduction in pollution.
Changing consumer preferences: Technological progress may lead to a decline in the consumption of cultural goods, or increase the consumption of other goods. Or it can increase consumption of other goods, which has a diminishing marginal utility. But cultural consumption can increase with technological change, which can increase the price of a cultural good, or bundle multiple cultural goods into a single valuable experience.
Artifacts
The creation of technical artifacts is a synthetic activity. However, this activity is different from the creation of phenomena in science. It involves synthesis of the functional components that realize the total function of the technological artifact. It is an activity that is not limited to scientists.
In this book, Pinch discusses various studies that have investigated how people change and use physical artifacts to produce new technologies. Among the examples cited are an electronic publishing software and a synthesizer, which consist of software and hardware. The authors discuss both the historical and sociological contexts in which these technologies were produced.
Processes
The introduction of new technologies has brought about numerous changes in manufacturing. While some changes affect only a single industry, others have a profound impact on every aspect of business. Some technologies are so disruptive that they require a total overhaul of processes. While this task can be daunting, it can yield immediate benefits for businesses. These benefits can include increased productivity, reduced material waste, and better communication between different departments.
Actors
Actors who are involved in the production of new technologies face challenges as many do not have the means to consider broader societal impacts. In addition, identifying relevant platforms can be difficult. Many existing platforms do not take into account the diverse actors, cross-border nature of the technologies, or the differing political and value systems of the actors involved.
Capital
Capital refers to the money used to produce new things. The money can be generated through production, or it can be used to generate more production. Capital resources include tools and machinery used in the production process. Increasing the supply of capital goods helps boost the capacity of an economy. Capital is also used to earn interest for its owners.
The amount of money spent on capital is one of the main factors that determine how much of a new product a company can produce. It is important to remember that capital is not the same thing as financial capital. Capital goods are made of manufactured resources and are used in the production of other products.
The other two factors that affect production are money and capital finance. Neither of these two factors can be created unless someone else puts in the money. The money is called financial capital, and it does not count as capital in its own right. Financial capital is the income that businesses use to finance production.
Scientific investment in research and innovation is a major factor in determining the rate at which new technology is developed. It also affects the amount of income earned by different groups of people. Investments in research and development are also affected by the gains from prior research and redundancy in existing research. This, in turn, affects the variety of new products produced and the emergence of new markets.