ABSTRACT

Technological change is undoubtedly one of the driving forces of our economies, and two striking features of our production systems consist of technological variety on the one hand, and technological persistence on the other. The main aim of the present chapter is to analyse the process of competition between two technologies, one which we will call ‘old’ and the other which will be defined as ‘new’, while reviewing some of the determinants of both variety and mechanisms which favour persistence. The interest in such a topic arises from the observation that there exist technologies which experience a life which is much longer than expected, as they are – at least technologically – overwhelmingly outperformed by new and emerging ones. Economic theory has for a long time already hinted at some mechanisms which contribute to prolonging the life of ‘old’ technologies, and in particular learning-by-doing (Smith 1776; Arrow 1962) and learning-by-using (Rosenberg 1982), to which we ought to add cost analysis as at first developed by Frankel (1955) and, more thoroughly, by Salter (1969). What we are mainly interested in here is the sort of mechanism which implies intentional action aimed at improving the performance of an ‘old’ technology; this action is stimulated by the emergence of a new technology which is devoted to supplying the same sort of operations or services. This mechanism is often referred to as the ‘sailing ship effect’, after Gilfillan’s study on innovation in ships (Gilfillan 1935). The chapter is divided in the following way: Section 2 hints at technological variety and theoretical justifications of the coexistence of old and new technologies; Section 3 explicitly recalls examples of technological competition between old and new technologies; Section 4 contains the model proposed and the simulations which describe the process of competition between two technologies via improved performance; Section 5 contains the conclusions and makes explicit the pros and cons of the model.