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Capacity utilization revisited: software, control and the growth of large technical systems

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  • Paul Nightingale
  • Tim Brady
  • Andrew Davies
  • Jeremy Hall

Abstract

This paper explains how a class of IT-intensive capital goods called control systems are used to co-ordinate the flow of goods, traffic, materials, funds, services or information through complex supply, production or distribution systems. The paper examines how they increase productivity by improving the utilization of installed capacity, creating economies of system that are distinct from the traditional economies of scale, speed and scope. The paper explains which sectors they are important in, and how innovation in control technologies relates to architectural changes in Large Technical Systems. It is illustrated by case studies of four very different sectors: elevators, retailing, telecommunications and investment banking. While control systems improve efficiency and enable product innovation, they also create reliability problems and can alter the social distribution of risk. Copyright 2003, Oxford University Press.

Suggested Citation

  • Paul Nightingale & Tim Brady & Andrew Davies & Jeremy Hall, 2003. "Capacity utilization revisited: software, control and the growth of large technical systems," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 12(3), pages 477-517, June.
    • Handle: RePEc:oup:indcch:v:12:y:2003:i:3:p:477-517
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    Cited by:

    1. Daniel Scholten & Rolf Künneke, 2016. "Towards the Comprehensive Design of Energy Infrastructures," Sustainability, MDPI, vol. 8(12), pages 1-24, December.
    2. Petersen, Alexander M. & Rotolo, Daniele & Leydesdorff, Loet, 2016. "A triple helix model of medical innovation: Supply, demand, and technological capabilities in terms of Medical Subject Headings," Research Policy, Elsevier, vol. 45(3), pages 666-681.
    3. Briec, Walter & Kerstens, Kristiaan & Prior, Diego & Van de Woestyne, Ignace, 2010. "Tangency capacity notions based upon the profit and cost functions: A non-parametric approach and a general comparison," Economic Modelling, Elsevier, vol. 27(5), pages 1156-1166, September.
    4. Künneke, Rolf & Groenewegen, John & Ménard, Claude, 2010. "Aligning modes of organization with technology: Critical transactions in the reform of infrastructures," Journal of Economic Behavior & Organization, Elsevier, vol. 75(3), pages 494-505, September.
    5. Ekaterina Prytkova, 2021. "ICT's Wide Web: a System-Level Analysis of ICT's Industrial Diffusion with Algorithmic Links," Jena Economics Research Papers 2021-005, Friedrich-Schiller-University Jena.
    6. Mustansar, Talreja, 2023. "Financial innovation, technological improvement and bank’ profitability," OSF Preprints 8wy95, Center for Open Science.
    7. Cynthia Bansak & Norman Morin & Martha Starr, 2007. "Technology, Capital Spending, And Capacity Utilization," Economic Inquiry, Western Economic Association International, vol. 45(3), pages 631-645, July.
    8. Marini, Giovanni & Pannone, Andrea, 2007. "Capital and capacity utilization revisited: A theory for ICT-assisted production systems," Structural Change and Economic Dynamics, Elsevier, vol. 18(2), pages 231-248, June.
    9. Cedric Durand & Céline Baud, 2023. "Profit-making, costs, and investments in the digitalization of retailing—The uneven trajectories of Carrefour, Amazon and Walmart (1995–2019)," Post-Print hal-04262663, HAL.
    10. Lehtonen, Markku & Nye, Sheridan, 2009. "History of electricity network control and distributed generation in the UK and Western Denmark," Energy Policy, Elsevier, vol. 37(6), pages 2338-2345, June.
    11. Inge Ivarsson & Claes Göran Alvstam, 2017. "New technology development by Swedish MNEs in emerging markets: the role of co-location of R&D and production," Asian Business & Management, Palgrave Macmillan, vol. 16(1), pages 92-116, April.
    12. Rolf Künneke, 2012. "Mapping Institutional, Technological and Policy Configurations of Inverse Infrastructures," Chapters, in: Tineke M. Egyedi & Donna C. Mehos (ed.), Inverse Infrastructures, chapter 3, Edward Elgar Publishing.
    13. Geels, F.W. & Sareen, S & Hook, A. & Sovacool, B.K., 2021. "Navigating implementation dilemmas in technology-forcing policies: A comparative analysis of accelerated smart meter diffusion in the Netherlands, UK, Norway, and Portugal (2000-2019)," Research Policy, Elsevier, vol. 50(7).
    14. Paul Nightingale, 2014. "What is technology? Six definitions and two pathologies," SPRU Working Paper Series 2014-19, SPRU - Science Policy Research Unit, University of Sussex Business School.
    15. Nightingale, Paul, 2004. "Technological capabilities, invisible infrastructure and the un-social construction of predictability: the overlooked fixed costs of useful research," Research Policy, Elsevier, vol. 33(9), pages 1259-1284, November.
    16. Keren Naa Abeka Arthur, 2017. "Financial innovation and its governance: Cases of two major innovations in the financial sector," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 3(1), pages 1-12, December.
    17. Dawei (David) Zhang & Barrie R. Nault & Xueqi (David) Wei, 2019. "The Strategic Value of Information Technology in Setting Productive Capacity," Information Systems Research, INFORMS, vol. 30(4), pages 1124-1144, December.
    18. Walter Briec & Kristiaan Kerstens & Diego Prior, 2009. "Tangency Capacity Notions Based upon the Pro?t and Cost Functions: A Non-Parametric Approach and a Comparison," Working Papers 2009-ECO-05, IESEG School of Management.
    19. Simone Vannuccini & Ekaterina Prytkova, 2021. "Artificial Intelligence’s New Clothes? From General Purpose Technology to Large Technical System," SPRU Working Paper Series 2021-02, SPRU - Science Policy Research Unit, University of Sussex Business School.
    20. Paul Windrum & Andreas Reinstaller & Christopher Bull, 2009. "The outsourcing productivity paradox: total outsourcing, organisational innovation, and long run productivity growth," Journal of Evolutionary Economics, Springer, vol. 19(2), pages 197-229, April.
    21. Clò, Stefano & Florio, Massimo & Rentocchini, Francesco, 2020. "Firm ownership, quality of government and innovation: Evidence from patenting in the telecommunication industry," Research Policy, Elsevier, vol. 49(5).
    22. Greco, Marco & Grimaldi, Michele & Locatelli, Giorgio & Serafini, Mattia, 2021. "How does open innovation enhance productivity? An exploration in the construction ecosystem," Technological Forecasting and Social Change, Elsevier, vol. 168(C).
    23. Daniele Rotolo & Ismael Rafols & Michael Hopkins & Loet Leydesdorff, 2014. "Scientometric Mapping as a Strategic Intelligence Tool for the Governance of Emerging Technologies," SPRU Working Paper Series 2014-10, SPRU - Science Policy Research Unit, University of Sussex Business School.
    24. Pannone, Andrea, 2010. "Production, unemployment and wage flexibility in an ICT-assisted economy: A model," Structural Change and Economic Dynamics, Elsevier, vol. 21(3), pages 219-230, August.
    25. Joakim Björkdahl & Magnus Holmén, 2019. "Exploiting the control revolution by means of digitalization: value creation, value capture, and downstream movements," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 28(3), pages 423-436.

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