Innovation and Technological Change

In its studies of technological innovation, ANT stresses the ability of each entity, especially nonhuman ones, to act and interact in a specific way with other humans or nonhumans.

Innovation and Technological Change

Technological innovation is the economic function through which new technologies are introduced into production and consumption. It entails recognizing new technological possibilities, organizing the human and financial resources needed to transform them into useful products and processes, and sustaining the requisite activities. It is important because technological advances have played a key role in facilitating radically improved standards of living. Innovation is said to be endogenous; i.e., it is responsive to changes in demand and supply conditions. A simple model distinguishing demand-pull from technology-push innovations is presented. Innovators are usually unable to capture all of the incremental economic benefits their contributions yield, which can lead to incentive failures characterized as ‘the appropriability problem.’ Innovative activities also entail high risks of technological failure and (especially) the misperception of market demands. To cope with these problems, policies such as the patent system and institutions such as high-technology venture capital markets have evolved.