• “Even under the most favorable conditions for advancing the scale frontier the cost side of the equation imposes fairly strict upper limits on the economical pace of advance, and trying to force the pace could mean sharply rising cost of development. The experience required for pushing out the scale frontier is related to time and cannot be acquired by increasing the number of similar new units. Perhaps the greatest uncertainties connected with units arise from problems that may not show up until the units have been in operation a few years. For the industry as a whole, the socially optimal number of pioneering units during the first two or three years of any major advance in scale, design, or steam conditions is probably rather small, most often ranging from perhaps two or three or half a dozen [6]” (William Hughes, “Scale frontiers in electric power”, in William Capron [ed.], Technological change in regulated industries [The brooking institution, washington, d.c., 1971], p.52).
Nathan Rosenberg, Inside the black box: technology and economics, 1982
p.14
the distinction between inventive activity that is directed toward product improvement or entails the invention of a new product, and inventive activity that is cost-reducing ── or process invention.
p.108
In their earliest stages, innovations are often highly imperfect and are known to be so. Innumerable “bugs” may need to be worked out.8
8 This term should be taken to include a great many production problems involving the use of new equipment that become apparent only as a result of extensive use ─ for example, metal fatigue in aeroplanes. William Hughes has made this point well with respect to exploration of the scale frontier in electric power generation: “Even under the most favorable conditions for advancing the scale frontier the cost side of the equation imposes fairly strict upper limits on the economical pace of advance, and trying to force the pace could mean sharply rising cost of development. The experience required for pushing out the scale frontier is related to time and cannot be acquired by increasing the number of similar new units. Perhaps the greatest uncertainties connected with units arise from problems that may not show up until the units have been in operation a few years. For the industry as a whole, the socially optimal number of pioneering units during the first two or three years of any major advance in scale, design, or steam conditions is probably rather small, most often ranging from perhaps two or three or half a dozen [6]” (William Hughes, “Scale frontiers in electric power”, in William Capron [ed.], Technological change in regulated industries [The brooking institution, washington, d.c., 1971], p.52). One of the other virtues of the Hughes article is its forceful reminder of the intimate link that often exists between technological progress and economies of scale. “The realization of latent scale economies is an especially important form of technological progress in the utility industries” (ibid.,p.45).
p.137
This is also the case in radar installations for both military and civilian purposes.32
pp.137─138
32 Burton Klein has commented on the preoccupation with reliability problems in the introduction of radar technology. “In radar development, probably much more has been spent on overcoming reliability problems than on all other problems combined.” The Rate and Direction of Inventive Activity (National Bureau of Economic Research, Princeton university press, princeton, 1962), p. 480. More generally, Klein states: “Experience indicates that one of the most unpredictable things about a new piece of equipment is the problems that will be encountered in making it perform reliably, and the time that it will take to overcome these problems. One of the main reasons why development costs tend to encountered and the amount of testing and modification that will be required to overcome them.” Ibid., p. 482. Klein's comments would apply equally well to the construction of the Minuteman missile system, the essential problem of which was the attainment of sufficiently high levels of reliability.
p.138
This issue is compounded by the fact that breakdowns are extremely difficult to deal with in industries where malfunctioning equipment is inaccessible. Classic examples include undersea cables in the communications industry ─ and, more recently, communications satellites in space. In fact, the desire to reduce labor intensive maintenance and repair activities has been a major factor in the design of telephone equipment.33 Such concerns, moreover, have been responsible for one of the most important inventions of the 20th century ─ the transistor. Bell Laboratories research has for many years been geared to increasing the reliability and decreasing the maintenance costs of systems components. The research program, which was initiated by Mervin J. Kelly in the 1930s to provide a solid-state amplifier, culminated in the invention of the transistor by Bardeen, Brattain and Shockley in 1947.34 Moreover, the systemic complexity of the telephone industry makes it virtually impossible to design equipment in the laboratory that will perform flawlessly when installed. Here, as in aircraft, ships, or electric power generation, there is an initial shakedown period when unanticipated difficulties have to be dealt with. The recent introduction of electronic switching systems created many such difficulties.35
35 “Bell Laboratories people readily confess that in their original planning they underestimated the difficulties inherent in programming these computer-like machines to respond exactly right in every conceivable situation when people started to use them. It was only by actually putting the new system into operation and letting it cope with real traffic that all the program wrinkles could be smoothed out ─ a process that could never have taken place in the development laboratory.” Prescott Mabon, Mission Communications. The story of bell laboratories (Bell telephone laboratories, murray hill, N.J., 1975), p. 7.
(Inside the black box./ Nathan Rosenberg, 1. technological innovations., 2. technology─social aspects., HC79.T4R673 1982, 338'.06, first published 1982, )
____________________________________
Nathan Rosenberg, Inside the black box: technology and economics, 1982
p.14
the distinction between inventive activity that is directed toward product improvement or entails the invention of a new product, and inventive activity that is cost-reducing ── or process invention.
p.108
In their earliest stages, innovations are often highly imperfect and are known to be so. Innumerable “bugs” may need to be worked out.8
8 This term should be taken to include a great many production problems involving the use of new equipment that become apparent only as a result of extensive use ─ for example, metal fatigue in aeroplanes. William Hughes has made this point well with respect to exploration of the scale frontier in electric power generation: “Even under the most favorable conditions for advancing the scale frontier the cost side of the equation imposes fairly strict upper limits on the economical pace of advance, and trying to force the pace could mean sharply rising cost of development. The experience required for pushing out the scale frontier is related to time and cannot be acquired by increasing the number of similar new units. Perhaps the greatest uncertainties connected with units arise from problems that may not show up until the units have been in operation a few years. For the industry as a whole, the socially optimal number of pioneering units during the first two or three years of any major advance in scale, design, or steam conditions is probably rather small, most often ranging from perhaps two or three or half a dozen [6]” (William Hughes, “Scale frontiers in electric power”, in William Capron [ed.], Technological change in regulated industries [The brooking institution, washington, d.c., 1971], p.52). One of the other virtues of the Hughes article is its forceful reminder of the intimate link that often exists between technological progress and economies of scale. “The realization of latent scale economies is an especially important form of technological progress in the utility industries” (ibid.,p.45).
p.137
This is also the case in radar installations for both military and civilian purposes.32
pp.137─138
32 Burton Klein has commented on the preoccupation with reliability problems in the introduction of radar technology. “In radar development, probably much more has been spent on overcoming reliability problems than on all other problems combined.” The Rate and Direction of Inventive Activity (National Bureau of Economic Research, Princeton university press, princeton, 1962), p. 480. More generally, Klein states: “Experience indicates that one of the most unpredictable things about a new piece of equipment is the problems that will be encountered in making it perform reliably, and the time that it will take to overcome these problems. One of the main reasons why development costs tend to encountered and the amount of testing and modification that will be required to overcome them.” Ibid., p. 482. Klein's comments would apply equally well to the construction of the Minuteman missile system, the essential problem of which was the attainment of sufficiently high levels of reliability.
p.138
This issue is compounded by the fact that breakdowns are extremely difficult to deal with in industries where malfunctioning equipment is inaccessible. Classic examples include undersea cables in the communications industry ─ and, more recently, communications satellites in space. In fact, the desire to reduce labor intensive maintenance and repair activities has been a major factor in the design of telephone equipment.33 Such concerns, moreover, have been responsible for one of the most important inventions of the 20th century ─ the transistor. Bell Laboratories research has for many years been geared to increasing the reliability and decreasing the maintenance costs of systems components. The research program, which was initiated by Mervin J. Kelly in the 1930s to provide a solid-state amplifier, culminated in the invention of the transistor by Bardeen, Brattain and Shockley in 1947.34 Moreover, the systemic complexity of the telephone industry makes it virtually impossible to design equipment in the laboratory that will perform flawlessly when installed. Here, as in aircraft, ships, or electric power generation, there is an initial shakedown period when unanticipated difficulties have to be dealt with. The recent introduction of electronic switching systems created many such difficulties.35
35 “Bell Laboratories people readily confess that in their original planning they underestimated the difficulties inherent in programming these computer-like machines to respond exactly right in every conceivable situation when people started to use them. It was only by actually putting the new system into operation and letting it cope with real traffic that all the program wrinkles could be smoothed out ─ a process that could never have taken place in the development laboratory.” Prescott Mabon, Mission Communications. The story of bell laboratories (Bell telephone laboratories, murray hill, N.J., 1975), p. 7.
(Inside the black box./ Nathan Rosenberg, 1. technological innovations., 2. technology─social aspects., HC79.T4R673 1982, 338'.06, first published 1982, )
____________________________________
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