The role of technology in the creation of wealth

1
The role of technology in the creation of wealth

• The technomic perspective

2
Advances of technological paradigm

• The stone age
• The bronze age
• The iron age
• The steam power age
• The electricity age
• The nuclear power age
• The electronics age
• The aerospace age
• The information age
• The biotechnology age

3
In search of the original of wealth

• The driving forces
• Population
• Specialization? trading? pricing? market
  mechanism
• Laissez-faire doctrine the invisible hands
• Capital
• Firm organization
• Technology innovation
• The visible hands participation intervention

4
Adam Smith Joseph Schumpeter

• Production coordinated by the market price
  mechanism
• Comparative advantage international trading
• Specialization, differentiation, distinctiveness
• Competition rent-seeking behavior
• Innovative destruction
• Monopoly is the compensation of innovation

5
The facilitators of wealth growth

• The protection of property rights
• Resolve the problem of free-riding
• The enforcement of formal rules
• Allow the existence of the private informal rules
• Rescue the problem of market failure

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The long-wave cycle

• The take-off power of investment
• Robert Solow, 1987 Nobel prize winner
• The limits of capital investment
• Barrier of productivity
• The economic depression long-term cycle
• The short-term recession cycle
• The quality of investment
• Breakthrough of technological paradigm
• Education on innovational potential

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The wealth growth
f(K, T3)
products
f(K, T2)
f(K, T1)
Capital investment
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Technology cycle, Betz(1987)

• Science pushes technological innovation
• New technological innovation develops the product
  opportunity
• New product opportunity creates the production
  industry
• Product production refine and redefine the
  market
• Market expansion
• New entrants and the surplus of production
  capacity
• Profit erosion by the price competition
• Market consolidation and firm exit
• Frustration of financial market and economic
  recession
• New paradigm extrusion brings about the new
  investment confidence

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Evolution of production technology

• Before scientific management
• Agricultural cooperative industry
• Scientific management age
• Organizational industrial relation age
• Operation Research age (World War I,II)
• Computer-aided analysis age (1950s)
• CNC automation age
• Cybernetics integration models
• Personal computer facilitated age
• Shift of technological paradigm- network
  penetration and new management style

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Evolution of product technology

• Mechanical weaving steam engine
• Telegraph telephone
• Motor Fright
• Television calculator
• IC Laser
• CPU NMR

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Technology and national economy

• Mission-oriented technology policy
• Diffusion-oriented
• Employment-oriented
• Export-oriented
• Search the key advantage from the perspective of
  global economy

12
Extended reading

• Review the recent reports on the new emerging
  giants in the future economic blocs (golden
  bricks). (This report issued by Goldman Sachs is
  available now at http//www.gs.com/insight/researc
  h/reports/99.pdf)
• The dragon China
• The bull India
• The lion Brazil
• The bear Russia
• Think over this forecasting and propose your
  comments