Economic Sources of Inventive Activity

Abstract

The fundamental conclusion of this paper is that technological progress is intimately dependent on economic phenomena. The evidence suggests that society may indeed affect the allocation of inventive resources through the market mechanism somewhat as it affects the allocation of economic resources generally. If this is true, then technological progress is not an independent cause of socio-economic change, and an interpretation of history as largely the attempt of mankind to catch up to new technology is a distorted one. Cultural lags undoubtedly exist in social history. The automobile—to use an obvious example—rendered obsolete many pre-existing social arrangements and behavior patterns. But the reverse is also true. New goods and new techniques are unlikely to appear, and to enter the life of society without a pre-existing,—albeit possibly only latent—demand. Even a longstanding demand may have been intensified shortly before a technique to satisfy it is invented. In addition to cultural lag, there exists technological lag—a chronic tendency of technology to lag behind demand.