ABSTRACT
Most historical and policy work on technology generation embeds the process in some kind of “induced innovation” framework. The framework is explicitly dynamic. Each new technology interacts with structural characteristics of the rural sector such as farm size, tenure arrangements, markets, etc., to generate demand for a new round of innovation. Because of the complexity of the issue involved, much of the work relating social organization to the efficiency of the markets for innovation has been centered on the historical experience of particular countries. The conceptual framework of mathematical programming also immediately makes clear that innovations induced by relative scarcity imply nothing about social optimality. The inducement mechanism can be strongly influenced by government price and income policy. When public sector organizations are available to play an effective role in “inducing” the supply of improved mechanical technology, their presence can provide important social benefits.
