Technology Spreading

Source:

The impact of public mechanical clocks on economic growth

Are Smart Phones Spreading Faster than Any Technology in Human History?

 

In a past post about short-termism, we introduced a picture that shows the shortening diffusion time of new technologies from telephone to internet access, which means the period of competitive advantage is shrinking for companies.

Today we go through two articles about the topic of technology spreading.

 

1.The public mechanical clock in 13th century

Lars Boerner, one of my lecturer in the EH department of LSE, wrote a paper about the impact of public mechanical clocks on mid-century Europe’s economic growth.

European cities that were quick to install mechanical clocks enjoyed greater growth than late adopters. However, it takes some time for the effects from fundamental innovations of this type to be realised because the technology must be accepted both culturally and socially and then applied to related economic activities.

We focus on the later part.

Starting in the late 13th century, clocks started spreading simultaneously across Italy, Germany, and England, and then spread until 1450 in most other Western and Central European Countries, including Belgium, the Netherlands, France, Spain, Poland, the current Czech Republic, and Scandinavia

The diffusion curve of the mechanical clocksevergninifig2

The spread followed the s-shaped distribution curve that is typical for new technologies. The distribution weighted by the total population size started slowly, then rose exponentially, and finally slowed down again, reaching a saturation point in 1450 with a relative decreasing adoption rate.

-> The economic use of clocks was a slow process of adoption.

<- Building a clock in a town was motivated by prestige and not by economic needs – towns did not forecast ex post benefits as an economically efficient application.
<- The use of clocks for coordination activities, such as market times or administrative town meetings, can already be observed during the 14th and 15th centuries, the use of clocks to monitor and coordinate labour processes evolved only slowly, in particular during the 16th century.
<- Finally, a cultural adoption reflected in the daily cultural and philosophical thinking of the time can be observed from the middle of the 16th century

The conclusion here is that for the implement of new technologies, it is indeed important to let societies learn to use them and adapt to them to reap the full benefits.

 

2.Smart phones spreads faster than any technology in human history

Today, we have the fastest ever diffusion speed in the human history: software apps are reaching tens of millions of users within weeks.

<- Underlying these developments: the unprecedented speed at which mobile computers are spreading.

Presented below is the U.S. market penetration achieved by nine technologies since 1876. Penetration rates have been organized to show three phases of a technology’s spread: traction, maturity, and saturation.

us_technology_adoption_rates

It took almost a century for landline phones to reach saturation, or the point at which new demand falls off. Mobile phones, by contrast, achieved saturation in just 20 years. Smart phones are on track to halve that rate yet again, and tablets could move still faster. 

-> Those technologies with “last mile” problems—bringing electricity cables or telephone wire to individual homes—appear to spread more slowly.

Smart phones have gone from 5 percent to 40 percent in about four years, despite a recession. [1]

mobile-phone-chart-v4_x616_1

 

[1]

In late 2006, the quarter before Apple announced its now-iconic iPhone, only 715,000 smart phones were sold, representing just 6 percent of U.S. mobile-phone sales by volume. Up to that point, the smart phone was spreading not much faster than personal computers had in the preceding decades, and more slowly than radio decades before.

That changed when Apple’s iPhone sold 1.12 million units in its first full quarter of availability, despite prices starting at $399. Year over year, the market share of smart phones almost doubled, to 11 percent of U.S. mobile-phone sales. Now Nielsen reports that smart phones represent more than two-thirds of all U.S. mobile-phone sales.

 

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