Discovery, Learning and Adoption of New Techniques: Choosing Specialization to Optimize Technical Progress

26 Pages Posted: 7 May 1998

See all articles by James E. Bessen

James E. Bessen

Technology & Policy Research Initiative, BU School of Law

Date Written: March 1998

Abstract

Why is it that adopting new technologies takes so long and costs so much? Clearly, firms do not know all the details necessary to implement a complex technology efficiently; learning these details requires extensive search. However, this explanation has a problem: even limited search may be so costly that newly discovered techniques will not be tried. We find that specialization solves this problem. If a complex process is divided into many small components, each searched in parallel, then discoveries are readily tested. Moreover, specialized search can perform surprisingly well even for processes of indefinite complexity. We measure the returns to search at 40 plant startups and find values consistent with specialization. This suggests that organizational factors may strongly influence how firms and nations adopt new technologies.

JEL Classification: D83, D2, O3

Suggested Citation

Bessen, James E., Discovery, Learning and Adoption of New Techniques: Choosing Specialization to Optimize Technical Progress (March 1998). Available at SSRN: https://ssrn.com/abstract=84588 or http://dx.doi.org/10.2139/ssrn.84588

James E. Bessen (Contact Author)

Technology & Policy Research Initiative, BU School of Law ( email )

765 Commonwealth Avenue
Boston, MA 02215
United States

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