CHAPTER
ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
The
Technological Innovation is a concept developed within the scientific field of
innovation studies which serves to explain the nature and rate of technological
change. A Technological Innovation can be defined as ‘a dynamic network of
agents interacting in a specific economic/industrial area under a particular
institutional infrastructure and involved in the generation, diffusion, and
utilisation of technology’.
The
approach may be applied to at least three levels of analysis: to a technology
in the sense of a knowledge field, to a product or an artefact, or to a set of
related products and artefacts aimed at satisfying a particular [societal]
function’. With respect to the latter, the approach has especially proven
itself in explaining why and how sustainable (energy) technologies have
developed and diffused into a society, or have failed to do so.
The
concept of a Technological Innovation was introduced as part of a wider
theoretical school, called the innovation approach. The central idea behind
this approach is that determinants of technological change are not (only) to be
found in individual firms or in research institutes, but (also) in a broad
societal structure in which firms, as well as knowledge institutes, are embedded.
Since the 1980s, innovation studies have pointed out the influence of societal
structures on technological change, and indirectly on long-term economic
growth, within nations, sectors or technological fields.
The
purpose of analysing a Technological Innovation is to analyse and evaluate the
development of a particular technological field in terms of the structures and
processes that support or hamper it. Besides its particular focus, there are
two, more analytical, features that set the Technological Innovation approach
apart from other innovation approaches.
Firstly,
the Technological Innovation concept emphasises that stimulating knowledge
flows is not sufficient to induce technological change and economic
performance. There is a need to exploit this knowledge in order to create new
business opportunities. This stresses the importance of individuals as sources
of innovation, something which is sometimes overseen in the, more
macro-oriented, nationally or sectorally oriented innovation approaches.
Secondly,
the Technological Innovation approach often focuses on system dynamics. The
focus on entrepreneurial action has encouraged scholars to consider a
Technological Innovation as something to be built up over time. This was
already put forward by Carlsson and Stankiewicz:
Technological
Innovations are defined in terms of knowledge/competence flows rather than
flows of ordinary goods and services. They consist of dynamic knowledge and
competence networks. In the presence of an entrepreneur and sufficient critical
mass, such networks can be transformed into development blocks, i.e.
synergistic clusters of firms and technologies within an industry or a group of
industries.
Technological
innovation is widely viewed as the key to economic growth, there is no consensus
on what makes some industries and countries more "innovative" than
others, or exactly how innovations fuel an economy. The authors, leading
economists and political scientists, have compiled evidence from nine countries
and nine industries to draw several cautionary lessons for policymakers. For
example, while innovation drove a late-1990s U.S. productivity surge in a few
key computer-related industries, there is no evidence that this had a
transformative effect on the rest of the economy. Conversely, Japan's extended
slump was caused not by a failure to innovate, as many believe, but rather by
deep-seated structural and macroeconomic failures.
Information technology accounts for more than
one-third of recent U.S. economic growth and nearly two-thirds of corporate
capital investment. "The new economy" appears omnipresent, but little
is actually known about its workings. This book explores the phenomenon in
studies of the United States, Japan, Germany, France, the United Kingdom, and
the Nordic states. Nine industry studies examine the Internet, computers and
semiconductors, banking, securities trading, venture capital, energy,
agricultural biotechnology, pharmaceutical biotechnology, and automobiles.
The relationship between innovation and
economic growth has been well studied. However, that is not to say that it is
well understood. Renowned scholars continue to work with incredibly simplified
models of an incredibly complex economy. Consequently, empirical results are
usually carefully annotated with caveats noting the limitations of all findings
and the great uncertainties that remain concerning fundamental assumptions in
the field.(Statistics Canada, Innovation Analysis Bulletin,2002)
A theoretical
link between innovation and economic growth has been contemplated since at
least as early as Adam Smith (1776). Not only did he articulate the
productivity gains from specialization through the division of labour as well
as from technological improvements to capital equipment and processes, he even
recognized an early version of technology transfer from suppliers to users and
the role of a distinct R&D function operating in the economy:
“All the improvements in machinery, however,
have by no means been the inventions of those who had occasion to use the
machines. Many improvements have been made by the ingenuity of the makers of
the machines, when to make them became the business of a peculiar trade; and
some by that of those who are called philosophers or men of speculation, whose
trade it is not to do anything, but to observe everything; and who, upon that
account, are often capable of combining together the powers of the most distant
and dissimilar objects. In the progress of society, philosophy or speculation
becomes, like every other employment, the principal or sole trade and
occupation of a particular class of citizens… and the quantity of science is
considerably increased by it. †(Smith,1776)
Although the
relationship between innovation and growth had been articulated at an intuitive
level for some time, innovation was not introduced into formal economic growth
models until 1957 (Solow, 1957). Robert Solow, a professor at MIT, was awarded
a 1987 Nobel Prize in Economics for this and related work. Like scholars before
him, he defined growth as the increase in GDP per hour of labour per unit time.
He carefully measured the fraction of this growth that was actually
attributable to increases in capital, such as investments in machinery and
related equipment, since the theory of the day was that capital accumulation
was the primary determinant of growth. However, capital accumulation accounted
for less than a quarter of the measured growth. Solow’s insight was in
attributing the remainder of the growth, the majority share, to "technical
change." The magnitude of the residual calculated in this empirical study
placed the role of innovation in economic growth squarely on centre stage,
where it has remained for the past half century. Since Solow’s contributions,
the relationship between innovation and growth has been modeled in increasingly
sophisticated ways. Perhaps the most notable recent advances came from Lucas
(1988) and Romer (1986, 1990), who emphasized the concepts of human capital and
knowledge spillovers, respectively. Following the recent idea of distinguishing
human capital, which is developed by investments in education and training,
from physical capital, Lucas modeled human capital with constant rather than
diminishing returns, thus offering useful insights into the critical role of a
highly skilled workforce for long-term growth. Romer endogenized innovation in
the growth model by introducing knowledge spillovers, which resulted in deep
implications for how scholars think about growth.
1.2 STATEMENT OF PROBLEMS
Every
nation begins its journey of development with predominantly traditional systems
characterized by poor products and poor technologies. The right kind of
education, infrastructure, and institutions will put them on a development
track, but not before they encounter a great deal of resistance from the old
guard and various interest groups.
To
be able to respond to the pressures of rapidly changing technology and
management, developing need strong modern institutions. These institutions form
the backbone of democratic functioning for law and order, defense, security,
industry, commerce, education, technology and many other related activities.
In today's
fast-changing Technological world, developing nations are now placing greater
emphasis on science and technology and setting up more institutions to promote
science. Today, developing nations are in dire need of technology to increase
productivity.
But these
technologies are in the hands of Western nations, who are trying very hard to
block their coming to the market. If leaders in developing nations do not
change and adopt some radical economic reforms, they will be left behind with a
primitive production base and obsolete technology and products.
1.3 OBJECTIVE OF THE STUDY
The
main purpose of this research work is evaluate technological and industrial
innovation to economics with particular reference to Nigeria and Enugu state
precisely and the specific objectives of this research work includes:
1. To
examine the impact of technological and industrial innovation to economic
growth of Nigeria.
2. To
examine the problems associated with technological and industrial innovation.
3. Proffer
possible solution to the problems
1.4 RESEARCH QUESTION
The
following research questions were formulated in this research work:
1. What
are the impact of technological and industrial innovation to economic growth of
Nigeria?
2. Is
there any relationship between economic growth and technological innovation?
3. What
are the problems associated with technological innovations in Nigeria and Enugu
state in particular?
1.5 SIGNIFICANCE OF THE STUDY
It
is important to point out that on completion of this work by the researcher, it
would be of immense significance to the following:
RESEARCHERS: Other researchers on the same or similar
topic would find this work helpful as it will form a base of review of related
literature and also a stepping-shine for future researchers.
ECONOMY:
This
work will help to improve the national output and thereby national income. This is because of improvement in the
efficiency and effectiveness of the operations as well as the overall success
of the state.
LAW MAKERS: The law makers will implement policies that will enhance the
technological improvement in Nigeria, The standard
of corporations will be increased as a result of the knowledge acquired from
this research work.
1.7
SCOPE AND LIMITATION OF THE STUDY
The
researcher considered precedent to limit the research work to Enugu state and
its environs.
During the
course of writing the project work the research encountered some problem
associated with finance, time and data collections.
FINANCE: Finance is the
background of every plan going by the present economic hardship facing the
entire country, I have limited finance which will not also found it difficult
to purchase much of my requirement so I could only carry out the research works
much, and my purpose could carry me.
TIME: One of the greatest shortcomings was time
factor for the mere fact that I am a student taking recognizance of the
academic region facing me as a final year student and it is incumbent on me to
attend classroom lectures carryout assignment, writing of term papers. Therefore I could not find it convenient in
completing such until this task, particularly in the area of field survey, which
involves going out in Enugu metropolis.
1.8 DEFINITION OF TERMS
Key
terms are used in the study have been defined to enhance understanding of such
variables in the context of this research.
Technology:
Is the making modification, usage, and knowledge of tools, machines,
techniques, crafts, systems, method of organization, in order to solve a
problem, improve a preexisting solution to a problem, achieve a goal or perform
a specification function and arrangement and procedures technologies.
Industry:
Is the production of an economic good or serves within an economy. And raw
materials industries may be agriculture based, manue based, mineral based,
porent based and the amount of capital invested number of people employed and
the volume of production and manufacturing became a key sector of production
and labour.
Innovation:
The process by which an idea or innovation is translated into a good or service
for which this process. To be called an innovation, an idea must be replicable
at an economical cost and must satisfy a specific needs information,
imagination and initation.
Economic
Growth: A positive change in the level of production of goods and services by a
country over a certain period of time. Norminal growth defined as economic
growth including inflation while real growth is norminal growth minus inflation
and is usually brought about by technological innovation and positive external
forces.
Development:
Is the systematic use of scientific and technical knowledge to meet specific
objectives or requirements. And an extension of the theoretical or practical
aspects of a concept, design, discovery or innovation and economic and social
transformation.
Technological
growth: Is the history of technology is the history of the innovation of tools
and techniques, and is similar in many ways to the history.
Keys:
Technology, innovation, development and industry and economic growth.
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