351-0379-00: Innovation Systems and Technical

Change

2.1 Large Technical Systems

Maria Kaninia [10-936-342]

Tuesday, March 29, 2011

Definition: Technological systems (TS) comprise physical artifacts, organisations and non-physical (e.g. scientific, legislative) components, which interact via various mechanisms towardsthe achievement of the system goal. A TS is originated by the so-called “system-builders”, whomanage to synthesize the components mentioned above. The environment of a TS can be dividedinto two categories of factors - both unidirectionally related to the TS: those that affect the systemand those that are affected by it. The goal of a TS is to modify the material world in order toincrease social welfare. Because a TS can be enclosed in a broader superordinate system, its outputand power to affect the environment are limited. The human capital of a TS designs and developsthe system, and also monitors its progress, providing corrective feedback. However, only a minorityof workers actually have any degree of freedom, since labor is scientifically organised. Because TSgravitate to a hierarchical structure, it is possible to identify multiple subsystems within a large TSfor the purposes of analysis. So, the level of analysis can range from low level (individual technicalcomponents) to very high level (abstract view of production systems), also depending on the politicalscope of the person studying the system. The inputs and outputs of a TS can be external (whenlinking the system to the environment) or internal (when interlinking various subsystems) and takethe form of material, monetary or knowledge flows.

Pattern of evolution: By studying large, modern TS, patterns can be identified, mainly per-taining to systems on a growth path. Nonetheless, also contracting systems can provide -by contrast-paradigms for growth. These patterns can be described as a non-strict sequence of phases. Duringeach phase, a particular type of “entrepreneur” or “system designer” is predominant in driving theprocess. Typical roles are inventor, manager or financier.

• Invention: During the first stage of a TS, inventions are radical. Those occurring duringlater stages are incremental. Already established large TS have a tendency to hold a defensivestance against radical inventions, which is a reason why many of the break-through inventionsof the late 19th and early 20th centuries were achieved by independent professional inventors,who often exploited earlier, failed inventions. Their independence ensured freedom to chooseprojects to work on, but, as trade-offs, they had difficulty in identifying current critical topics(however, exchanges through academia and publication of patents led many inventors to simul-taneously work on similar projects). Also, they did not have guaranteed financing, so, in orderto secure financial back-up, independent inventors often teamed up with venture capitalists.There are also historical examples of inventors turning to the government for financing (e.g.during the armament race period in the early 20th century).

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Maria Kaninia [10-936-342]351-0379-00 Innovation Systems and Technical Change

2.1 Large Technical Systems

• Development: This stage corresponds to the shift of the original invention into an innovativesystem which is survivable in the economic sense, while influenced by many (social, economic,political) parameters. Invention is still a characteristic of the TS during this stage, which alsoinvolves testing and the development of binding interactions between system components.

• Innovation: In the innovation stage, the inventor-entrepreneur is ready to bring the output(product) of the TS to the market, which also signifies that the manager-entrepreneur isgradually taking over. This can be done either by founding a new company (as Edison famouslydid), or by having an established company “absorb” the innovative TS. Because system builderswant to reduce the influence of external parameters, they favour vertical structures for theemerging TS.

• Technology transfer: This stage implicates the propagation of innovative knowledge andmay overlap with different stages. Given that a TS is saddled with parameters imposed byits environment (e.g. legislative or market factors), an adaptation process is also required inorder to transfer the TS to a different environment. Adaptation is related to the concept oftechnological style. This concept is used to explain how TS that are governed by identi-cal physical laws and technical knowledge end up being implemented in different variations,depending on political, geographical, economic and other settings.

• Growth, competition, consolidation: The growth of a TS is mainly driven by the effortto increase the load factor (therefore maximise its investment utilisation) in conjunction withthe effort to ensure diversified markets for its output. During the growth process, “reversesalients” may appear, referring to isolated technical or organisational problems which impedethe progress of the entire supply chain of the TS. In this case, the TS first locates and thentargets the offending problem with ample resources; however, given the conservative tendenciesof established TS, the solution to the problem may occasionally be generated outside theTS. Thus, competition is initiated. Instead of competition leading to one TS prevailing overanother, it is also possible that they merge (consolidate).

• Momentum: Established TS develop momentum (which is often erroneously mistaken forautonomy); the physical analogy implicates growth rate as a measure of velocity, networks ofpersons and organisations with a vested interest in the further growth of the TS as a measureof inertia, and system goals as an indication of direction. As a TS reaches maturity, alsoits inertia increases, first because the implicated network of agents becomes larger and morecomplex, and also because invested capitals require that a minimum trajectory is followed, inorder that a break-even point is reached.

Conclusion: In the above, a definition of technical systems is presented, along with a sequencepattern that is commonplace in large growing technical systems. The individual stages of the evo-lution process are also briefly explained.

Source: Hughes, T.P., 1987. The Evolution of Large Technological Systems, in: Bijker, W.,Hughes, T.P. and Pinch, T. (Eds.), The Social Construction of Technological Systems. Cam-bridge/MA, pp. 51-82

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