creation of wealth

dotardhousesMechanics

Nov 18, 2013 (3 years and 9 months ago)

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The role of technology in the
creation of wealth

The technomic perspective

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

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


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

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

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

The wealth growth

Capital investment

products

f
(K, T1)

f
(K, T2)

f
(K, T3)

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

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

Evolution of product
technology


Mechanical weaving & steam engine


Telegraph & telephone


Motor & Fright


Television & calculator


IC & Laser


CPU & NMR

Technology and national
economy


Mission
-
oriented technology policy


Diffusion
-
oriented


Employment
-
oriented


Export
-
oriented


Search the key advantage from the
perspective of global economy

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/research/reports/99.pdf)


The dragon: China


The bull: India


The lion: Brazil


The bear: Russia


Think over this forecasting and propose your
comments