It is widely believed that technological change is essential for economic growth and social progress. In this report, a review is conducted of literature analysing the nature and effect of technological change; and a case study of the wool-harvesting industry in Australia is presented as an illustrative example of the process of technological change.
In the literature cited, technological change is regarded as a dynamic process involving the creation and accumulation of information. Creative activity (namely, invention and innovation) is examined from the traditional perspective of expected profit. Reference is made to the rejection of the profit motive as the sole stimulus for the invention, innovation and adoption of new technology. The role of research and development in producing technological change is also examined, as are the contributions of organizational climate and government support to the successful outcome of R&D.
The inadequacy of measuring the effects of technological change in terms of implications for productivity and profit, is explained as a consequence of the fact that technological change embodies an information process, the value of which cannot yet be determined. The effects of technological change must therefore be evaluated more pragmatically and cautiously, at least until economic theory is able to quantify the role of the information process.
The efforts to construct a robot sheep-shearer for commercial application in Australia in the next five to ten years, are discussed in comparison with alternative methods of wool harvesting. The likelihood of commercial success of automatic mechanical shearing is assessed in the context of the publically-funded R&D process and of the episodes of radical technological change in the Australian wool-harvesting industry, which are treated as broad precedents which will determine the course of any future technological change in methods of defleecing sheep. The difficulty of selecting appropriate new technologies, and of ensuring their Commercial acceptance and success, is emphasized1 as is the uncertainty of a positive outcome in the long run.