Inventing technological innovation

In “Retardation of Industrial Growth†(1929), Simon Kuznets explained economic growth in terms of “technical change†. Thirty years later in Lecture on Economic Growth, technical change had disappeared from Kuznets’ vocabulary (Kuznets, 1959). Like Vernon Ruttan, Jacob Schmookler and Edwin Mansfield, Kuznets developed a lexicon, but technology, technical change and technological change do not appear in it.1 Kuznets explained economic growth in terms of “innovation†, defined as “a new application of either old or new knowledge to production processes†(Kuznets, 1959: 29). Why the shift in vocabulary? At the Social Science Research Council (SSRC) conference of 1951, Kuznets had some reservations concerning the measurement of technological change. Because “in general, production change is an intertwining of change in technology, social organization and human society†, Kuznets claimed that “we may be doomed to a position in which we can measure only economic growth, but not its causes†(Kuznets, 1951). This is a fundamental argument used for the study of technological innovation. “Most economists have given up now on the purely statistical attempts to aggregate the production function and the disaggregation of the components of technical change†, claimed British economist Christopher Freeman. The accuracy of these estimates is poor (Freeman, 1982: 196).