Technological Change, the Learning Curve and Profitability

This accessible book provides a rigorous explanation of the concepts and theory of technological change and learning in production. Dudley Jackson offers a thorough integration of theory and data to show how technological change and learning increase profitability. The impact of technological change and learning on the rate of profit are comprehensively explained with extensive use of 'real world' plant - and industry-level statistics. Data on the manufacturing industry in the United States is used to explain and exemplify neutral technological change, or increased multifactor productivity. Non-neutral capital-using/labour-saving technological change is then examined using data on the switch from steam to diesel locomotives in the railroad industry. The impact of technological change on unit cost and quality is examined in two case studies: automation in the pulp plant of a paper mill; and the refining of petroleum to produce gasoline of a higher octane rating. The theoretical background to, and derivation and use of, the learning curve is explained using data on the building of Liberty ships in individual shipyards during the Second World War. Finally the time constant progress function is introduced to show how learning increases profitability. This book will be of immense interest to students of microeconomics, strategic and production management, industrial organization and the economics of innovation and technology.