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The fascinating curve of technological progress: Why is technology getting cheaper?
Technological progress is not only the driving force of human civilization, but also the fundamental reason for changes in our lifestyles. With the evolution of innovation and technology, technology is driving great changes in the times and affecting all aspects of the economy and society. In the process, why do tech products get cheaper over time? The logic behind this phenomenon will be explored in depth below.
Definition of technological change
Technological Change (TC) refers to the overall process of invention, innovation and diffusion of technology or processes. It is not only the creation of new technologies, but also the continuous improvement of existing technologies and the wide application of these technologies in society and industry.
Technological changes involve continuously improving technical levels, which is the fundamental reason why we can achieve cost reductions.
Cost reduction curve
Many people's understanding of technological change relies on a model called the "learning curve." According to this model, production costs gradually decrease over time as technology matures and is optimized. For example, the cost of fuel cells is falling significantly every year.
The process of innovation and diffusion
The diffusion of new technologies shows the shape of an S-shaped curve. The initial technology is usually more difficult, then enters the peak period of successful innovation and high-level adoption. Finally, when the technology reaches the maximum market potential, the adoption rate will gradually decrease. . Important factors in this process include the advantages, compatibility, complexity, trialability and observability of innovative technologies.
The diffusion process of technology not only depends on the characteristics of the technology itself, but is also deeply affected by social environment and cultural factors.
Market-driven social process
As a social process, technological change not only considers the nature of technology, but also involves the economic benefits associated with it. In a free market economy, the motivation to maximize profits drives technological development. Technologies that do not meet the needs of economic benefits, even if they can meet certain needs of society, will often be eliminated by the market in the end.
Policy and Technological Change
Current policies can also make a difference by influencing the direction and pace of technological change. For example, the "Induced Technological Change hypothesis" suggests that certain policies can change the direction of technological progress by affecting relative factor prices. This is particularly evident in climate policy: as restrictions are placed on the use of fossil energy, this resource becomes relatively more expensive.
The role of communication channels
Communication channels play a vital role in technological change. The transmission of information mostly relies on mass media to increase awareness of new technologies, while face-to-face communication promotes people's understanding and acceptance of new technologies.
Conclusion
The development of technology is closely related to the social environment, including social culture, political institutions and market conditions. As technology continues to advance, we see more innovations appearing on the market, and these innovations are usually accompanied by continued reductions in costs. As technology further evolves in the future, we cannot help but ask: Can we take into account economic interests and social needs in technological changes and achieve a better balance?
