Topic 1- intro

Question 1

define technical change

Answer 1

Change in the amount of outputs produced from the same inputs, so graphically there’s a shift in the production possibility frontier and the production function. This results in increased productivity in all combinations of capital and labor.

Question 2

Define technological change

Answer 2

specific innovations in products and production processes. Technological change can trigger technical change.

Question 3

How does adoption and diffusion differ?

Answer 3

Adoption: factors for the choice of a household or a firm to invest in a specific technology -Diffusion: the process of adoption unfolding over time and their explaining mechanism

Question 4

What does “localized technological change” mean?

Answer 4

Technological change leads to a shift only in one specific technology -Change in technology does not affect the entire process of production Linked to the two types of biased technological changes (Harrow- and Solow-Neutral)

Question 5

What are the drivers of an innovation?

Answer 5

Differs depending on whether the innovation involves products or processes -Product innovation: The demand originating in the market from specific needs (market pull). It also ensure firms profitability through new products (technology push) -Process innovation: need to produce in an efficient way Induced by a change in the price of input factors (induced technological change) or by a product innovation

Question 6

At which level and how can an innovation be measured?

Answer 6

Innovation can be measured at country and regional Country: Global Innovation Index (GII) Input Sub-Index with five pillars (Institutions; Human capital and research; Infrastructure; Market sophistication; Business sophistication) Output Sub-Index with two pillars (Knowledge and technology outputs; Creative outputs) Calculated as weighted average (Sub-pillar, pillar) or simple average (Innovation Input Index, Innovation Output Index, Overall GII, Innovation Efficiency Ratio) Regional: Regional Innovation Scoreboard

Question 7

Define an innovation

Answer 7

A process or a product previously invented is transformed into a usable product. This typically takes place at firm level due to investments in R&D.