Skill transferability and the stability of transition pathways - a learning-based explanation for patterns of diffusion
Understanding and governing technology transitions is essential to cope with major challenges of the 21st century such as climate change or digitization. In this paper, a learning-based approach is developed to explain the dynamics of different transition pathways. Technological know-how is necessar...
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| Format: | Journal article |
| Language: | English |
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Springer
2021
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| Summary: | Understanding and governing technology transitions is essential to cope
with major challenges of the 21st century such as climate change or digitization.
In this paper, a learning-based approach is developed to explain the dynamics
of different transition pathways. Technological know-how is necessary to make
effective use of new machinery and capital goods. Firms and employees accumulate
technology-specific knowledge when working with specific machinery. Radical
innovation differs by technology type and pre-existing knowledge may be imperfectly
transferable across types. This paper addresses the implications of cross-technology
transferability of skills for firm-level technology adoption and its consequences for
the direction of macro-level technological change. A microeconomically founded
model of technological learning is introduced. The model is based on empirical
and theoretical insights from the innovation literature. In a simulation study using
the macroeconomic ABM Eurace@unibi-eco and applied to the context of green
technology diffusion, it is shown that a high transferability of knowledge has
ambiguous effects. It accelerates the diffusion process initially but comes at the cost
of long-term technological stability and specialization. For firms, it is easy to adopt
new technology, but also easy to switch back to the incumbent type. Technological
instability can be macroeconomically costly. |
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