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Productivity Improving Technologies (Historical) Information

Productivity improving technologies date back to antiquity, with rather slow progress until the late Middle Ages. Technological progress was aided by literacy and the diffusion of knowledge that accelerated after the spinning wheel spread to Western Europe in the 13th century. The spinning wheel increased the supply of rags used for pulp in paper making, whose technology reached Sicily sometime in the 12th century. Cheap paper was a factor in the development of the moveable type printing press, ca. 1440, which lead to a large increase in the number of books and titles published.[1][2]

Thus began the early modern period which started around the time of the age of discovery and was soon followed by the scientific revolution. Technological and economic progress did not proceed at a significant rate until the English Industrial Revolution in late 18th century and even then productivity grew about 0.5% annually. High productivity growth began during late 19th century in what is sometimes call the Second Industrial Revolution. Most major innovations of the Second Industrial Revolution were based on the modern scientific understanding of chemistry, electromagnetic theory and thermodynamics.

Productivity gains were not just the result of inventions, but also of continuous improvements to those inventions which greatly increased output in relation both capital and labor compared to the original inventions.

Since the beginning of the Industrial Revolution, some of the major contributors to productivity have been as follows:

1. Replacing human and animal power with water and wind power, steam, electricity and internal combustion and greatly increasing the use of energy

The Spinning Jenny and Spinning Mule (shown) greatly increased the productivity of thread manufacturing compared to the spinning wheel.

2. Energy efficiency in the conversion of energy to: useful work, process heat or chemical energy in the manufacture of materials

3. Infrastructures: canals, railroads, highways and pipelines

4. Mechanization, both production machinery and agricultural machines

5. Work practices and processes: The American system of manufacturing, Taylorism or scientific management, mass production, assembly line, modern business enterprise

6. Materials handling: bulk materials, palletization and containerization

7. Scientific agriculture: fertilizers and the green revolution, livestock and poultry management

8. New materials, new process for their production and dematerialization.

9. Communications: Telegraph, telephone, radio, satellites, fiber optic network and the Internet

10. Home economics: Public water supply, household gas, appliances

11. Automation and process control

12. Computers and software, data processing

In recent decades there here have been a number of excellent books and papers published on the history of technology, the role of energy in economics and related issues such as resource depletion, some of which are reference herein.

Contents

Details of productivity improving technologies

1900s photograph of barge pullers on the Volga River. Horses were also used.

A description of technologies that created the great productivity growth that began in the period from 1870-90 is given by David Ames Wells (1891).

“The economic changes that have occurred during the last quarter of a century -or during the present generation of living men- have unquestionably been more important and more varied than during any period of the world’s history”. David Ames Wells, 1889[3]

1. Replacing human and animal power and greatly increasing overall power

Before the industrial revolution the only sources of power were water, wind and muscle. Most good water power sites were developed during medieval period. In the 1750s John Smeaton, the "father of civil engineering," significantly improved the efficiency of the water wheel by applying scientific principles, thereby adding badly needed power for the Industrial Revolution.

In 1711 a Newcomen steam engine was installed for pumping water from a mine, a job that typically was done by large teams of horses, of which some mines used as many as 500. Fossil fuel energy first exceeded all animal and water power in 1870. The role energy and machines replacing physical work is discussed in Ayres-Warr (2004).[4]

By about 1870 steam power first exceeded all water, wind and muscle power.[4] While steamboats were used in some areas, as recently as the late 19th Century thousands of workers pulled barges. Until the late 19th century most coal and other minerals were mined with picks and shovels and crops were harvested and grain threshed using animal power or by hand. Heavy loads like 382 pound bales of cotton were handled on hand trucks until the early 20th century.

A young "drawer" pulling a coal tub along a mine gallery.[5] In Britain laws passed in 1842 and 1844 improved working conditions in mines.

Excavation was done with shovels until the late 19th century when steam shovels came into use. It was reported that a laborer on the western division of the Erie Canal was expected to dig 5 cubic yards per day in 1860; however, by 1890 only 3-1/2 yards per day was expected.[6] Today's large electric shovels have buckets that can hold 168 cubic meters and consume the power of a city of 100,000.[7]

Dynamite, a safe to handle blend of nitroglycerin and diatomaceous earth was patented in 1867 by Alfred Nobel. Dynamite increased productivity of mining, tunneling, road building, construction and demolition and made projects such as the Panama Canal possible.

Steam power was applied to threshing machines in the late 19th century. There were steam engines for supplying temporary power for stationary farm equipment that moved around on wheels under their own power. These were called road engines, and Henry Ford seeing one as a boy was inspired to build an automobile. Steam tractors were used but never became popular.

With internal combustion came the first mass produced tractors (Fordson ca. 1917). Tractors replaced horses and mules for pulling reapers and combine harvesters, but in the 1930s self powered combines were developed. Output per man hour in growing wheat rose by a factor of about 10 from the end of World War II until about 1985, largely because of powered machinery, but also because of increased crop yields.[8] Corn manpower showed a similar but higher productivity increase. See section 4: Mechanization in agriculture

One of the greatest periods of productivity growth coincided with the electrification of factories which took place between 1900 and 1930 in the U.S.[4] See: Mass production: Factory electrification

2. Energy efficiency and productivity: The Useful work growth theory

Energy efficiency has played a significant role in increasing productivity in the past; however, most industrial processes have exhausted the easy efficiency gains. The early Newcomen steam engine was less than 1% efficient and was improved to less than 2% before Watt's improvements. Watt's improvements increased thermal efficiency to 4%, and today's steam turbines have efficiencies in the 40% range.[9][10][11] See: Timeline of steam power

More efficient steam and internal combustion engines have higher power to weight ratios. The Newcomen and Watt engines operated near atmospheric pressure and used atmospheric pressure, or actually a vacuum caused by condensing steam, to do work. Higher pressure engines were light enough, and efficient enough to be used for powering ships and locomotives. Multiple expansion (multi-stage) engines were developed in the 1870s and were efficient enough for the first time to allow ships to carry more freight than coal, leading to great increases in international trade.[3] The most efficient prime mover is the two stroke marine diesel engine developed in the 1920s, now ranging in size to over 100,000 horsepower with a thermal efficiency of 50%. Steam locomotives that used up to 20% of the U.S. coal production were replaced by diesel locomotives after World War II, saving a great deal of energy and reducing manpower for handling coal, boiler water and mechanical maintenance.

Improvements in steam engine efficiency caused a large increase in the number of steam engines and the amount of coal used, as noted by William Stanley Jevons in The Coal Question. This is called the Jevons paradox.

Electric lights were far more efficient than oil or gas lighting and did not generate heat, smoke and fumes. Electric light extended the work day, making factories, businesses and homes more productive. Electric light was not a great fire hazard like oil and gas light.

When anti-friction bearings were introduced in locomotives three female office workers demonstrated their efficiency by manually pulling the Timken 1111 locomotive.

Industrial process have been continuously improved to reduce the energy consumption per unit of production. See: Section 8: New materials, processes and de-materialization

The Ayres-Warr Model(2004) analyzed the production function and explained part of the Solow residual by electrical generation efficiency.[4][12]

3. Infrastructures

Sailing ships could transport goods for over a thousand miles for the cost of 30 miles by wagon. A horse that could pull a one ton wagon could pull a 30 ton barge. During the English or First Industrial Revolution, supplying coal to the furnaces at Manchester was difficult because there were few roads and because of the high cost of using wagons. However, canal barges were known to be workable, and this was demonstrated by building the Bridgewater Canal, which opened in 1761, bringing coal from Worsley to Manchester. The Bridgewater Canal’s success started a frenzy of canal building that lasted until the appearance of railroads in the 1830s.[13][14]

Railroads greatly reduced the cost of overland transportation. It is estimated that by 1890 the cost of wagon freight was U.S. 24.5 cents/ton-mile versus 0.875 cents/ton-mile by railroad.[15] Also see: History of rail transport

Highways with internal combustion powered vehicles completed the mechanization of transportation. When trucks appeared ca. 1920 the price transporting farm goods to market or to rail stations was greatly reduced. Motorized highway transport also reduced inventories.

Before iron and steel were in widespread use, wooden pipelines were used, such as those once supplying water to London from springs located away from the city. Iron and steel pipelines came into use during latter part of the 19th century, but only became a major infrastructure during the 20th century. Centrifugal pumps and centrifugal compressors are efficient means of pumping liquids and natural gas.

The relative energy required for transport of a tonne-km for various modes of transport are: pipelines=1(basis), water 2, rail 3, road 10, air 100.[14]

Adriance reaper, late 19th century

4. Mechanization (general) and in agriculture[16]

The most important mechanical devices before the Industrial Revolution were water and wind mills. Water wheels date to Roman times and windmills somewhat later. Water and wind power were first used for grinding grain into flour, but were later adapted to power trip hammers for pounding rags into pulp for making paper and for crushing ore. Just before the Industrial revolution water power was applied to bellows for iron smelting. Wind and water power were also used in sawmills.[14] The technology of building mills and mechanical clocks was important to the development of the machines of the Industrial Revolution.

The spinning wheel was a medieval invention that increased thread making productivity by a factor greater than ten. One of the early developments that preceded the Industrial Revolution was the stocking frame (loom) of ca. 1589. Later in the Industrial Revolution came the flying shuttle, a simple device that doubled the productivity of weaving. Spinning thread had been a limiting factor in cloth making requiring 10 spinners using the spinning wheel to supply one weaver. With the spinning jenny a spinner could spin eight threads at once. The water frame (Ptd. 1768) adapted water power to spinning, but it could only spin one thread at a time. The water frame was easy to operate and many could be located in a single building. The spinning mule (1779) allowed a large number of threads to be spun by a single machine using water power. A change in consumer preference for cotton at the time of increased cloth production resulted in the invention of the cotton gin (Ptd. 1794). Steam power eventually was used as a supplement to water during the Industrial Revolution, and both were used until electrification. A graph of productivity of spinning technologies can be found in Ayres (1989), along with much other data related this article.[17]

The sewing machine, invented and improved during the early 19th century and produced in large numbers by the 1870s, increased productivity by more than 500%.[18]

Machine tools, which cut, grind and shape parts, were another important mechanical innovation of the Industrial Revolution. Perhaps the best early example of a productivity increase by machine tools and special purpose machines is the ca. 1803 Portsmouth Block Mills. With these machines 10 men could produce as many blocks as 110 skilled craftsmen.[14] However, around 1900, it was the combination of small electric motors, specialty steels and new cutting and grinding materials that allowed machine tools to mass produce steel parts.[7] Production of the Ford Model T required 32,000 machine tools.[19]

Modern manufacturing began around 1900 when machines, aided by electric, hydraulic and pneumatic power, began to replace hand methods in industry.[20] An early example is the Owens'es automatic glass bottle blowing machine, which reduced labor in making bottles by over 80%.[21]

Mechanical stokers for feeding coal to locomotives were in use in the 1920s. A completely mechanized and automated coal handling and stoking system was first used to feed pulverized coal to an electric utility boiler in 1921.[20]

Coal seam undercutting machines appeared around 1890 and were used for 75% of coal production by 1934. Coal loading was still being done manually with shovels around 1930, but mechanical pick up and loading machines were coming into use.[20] The use of the coal boring machine improved productivity of sub-surface coal mining by a factor of three between 1949 and 1969.[22]

Jethro Tull's seed drill (ca. 1701) was a mechanical seed spacing and depth placing device that increased crop yields and saved seed, which was important when yields were measured in terms of seeds harvested per seed planted, which was typically between 3 and 6. The seed drill was an important factor in the British Agricultural Revolution.

Since the beginning of agriculture threshing was done by hand with a flail, requiring a great deal of labor. The threshing machine (ca. 1794) simplified the operation and allowed it to use animal power. Threshing machines displaced thousands of workers in Europe, many of who were driven to the brink of starvation.

Threshing machine from 1881. Steam engines were also used instead of horses. Today both threashing and reaping are done with a combine harvester.

Before ca. 1790 a worker could harvest 1/4 acre per day with a scythe.[3] It was estimated that for each of Cyrus McCormick's horse pulled reapers (Ptd. 1834) freed up five men for military service in the U.S. Civil War.[19] By 1890 two men and two horses could cut, rake and bind 20 acres of wheat per day.[3] In the 1880s the reaper and threshing machine were combined into the combine harvester. These machines required large teams of horses or mules to pull. Over the entire 19th century the output per man hour for producing wheat rose by about 500% and for corn about 250%.[8]

Farm machinery and higher crop yields reduced the labor to produce 100 bushels of corn from 35 to 40 hours in 1900 to 2 hours 45 minutes in 1999.[16] The conversion of agricultural mechanization to internal combustion power began after 1915. The horse population began to decline in the 1920s after the conversion of agriculture and transportation to internal combustion.[23] In addition to saving labor, this freed up much land previously used for supporting draft animals.

The peak years for tractor sales in the U.S. were the 1950s.[23] There was a a also a surge in horsepower of farm machinery in the 1950s.

Unloading cotton ca. 1900. Steam powered conveyors[3] and cranes were also used for loading and unloading ships, but were replaced pneumatic and electric operated equipment, later joined by mobile loaders such as forklifts and eventually by containerization.

5. Work practices and processes[19]

A US airman operating a Hyster forklift. Pallets placed in rear of truck are moved around inside with a pallet jack (below). Where available pallets are loaded at loading docks which allow forklifts to drive on.

Changes to traditional work processes that were done after analyzing the work and making it more systematic greatly increased the productivity of labor and capital. This was the changeover from the European system of craftsmanship, where a crafstman made a whole item, to the American system of manufacturing which used special purpose machines and machine tools that made parts with precision so as to be interchangeable. The process took decades to perfect at great expense because interchangeable parts were more costly at first. Interchangeable parts were achieved by using fixtures to hold and precisely align parts being machined, jigs to guide the machine tools and gauges to measure critical dimensions of finished parts.

Other work processes involved minimizing the amount of steps in doing individual tasks, such as bricklaying, by performing time and motion studies to determine the one best method, the system becoming known as Taylorism after Fredrick Winslow Taylor who is the best known developer of this method, which is also known as scientific management after his work The Principles of Scientific Management. Electrification allowed the placement of machinery such as machine tools in a systematic arrangement along the flow of the work. The assembly line, which used motorized conveyors to transfer parts and assemblies to workers, was a key step leading to mass production.

Business administration, which includes management practices and accounting systems is another important form of work practices. Business administration as we know it arose from the mass production era.

Work processes are well described at the following links:

The American system of manufacturing, Taylorism or scientific management, mass production, assembly line, containerized freight
The handle on this pump jack is the lever for a hydraulic jack, which can easily lift loads up to 2-1/2 tonnes, depending on rating. Commonly used in warehouses and in retail stores.

Modern business enterprize (MBE) is the organization and management of businesses, particularly large ones.[24] MBE's employ professionals who use knowledge based techniques such areas as engineering, research and development, information technology, buisness administration, finance and accounting. MBE's typically benefit from economies of scale.

6: Materials handling: bulk materials, palletization and containerization

Bulk materials handling systems use a variety of stationary equipment such as conveyors, stackers, reclaimers and mobile equipment such as loaders to handle high volumes of ores, coal, grains, sand, gravel, crushed stone, etc. Bulk materials are systems are used at mines, for loading and unloading ships and at factories that process bulk materials into finished goods, such as steel and paper mills.

Around 1900 various types of conveyors, overhead cranes and industrial trucks began being used for handling materials and goods in various stages of production in factories. Conversion to powered material handling increased during WW 1 as shortages of unskilled labor developed and unskilled wages rose relative to skilled labor.[20]

Handling goods on pallets was a significant improvement over using hand trucks or carrying sacks or boxes by hand and greatly speeded up loading and unloading of trucks, rail cars and ships. Pallets can be handled with pallet jacks or forklift trucks. Loading docks built to architectural standards allow trucks or rail cars to load and unload at the same elevation as the warehouse floor.

Containerization was used in both world wars, particularly WW II, but became commercial in the 1960s. Containerization left large numbers of warehouses at wharves in port cities vacant, freeing up land for other development. See also: Intermodal freight transport

7. Scientific agriculture

Losses of agricultural products to spoilage, insects and rats contributed greatly to productivity. Much hay stored outdoors was lost to spoilage before indoor storage or some means of coverage became common. Pasteurization of milk allowed it to be shipped by railroad. (It was noted that calves fed pasteurized milk were less likely to develop tuberculosis, and soon it was found that pasteurization reduced the incidences of several other diseases in humans.)[3]

Keeping livestock indoors in winter reduces the amount of feed needed. Also, feeding chopped hay and ground grains, particularly corn (maize), was found to improve digestibility.[3] The amount of feed required to produce a kg of live weight chicken fell from 5 in 1930 to 2 by the late 1990s and the time required fell from three months to six weeks.[7]

The Green Revolution increased crop yields by a factor of 3 for soybeans and between 4 and 5 for corn (maize), wheat, rice and some other crops. Using data for corn (maize) in the U.S., yields increased about 1.7 bushels per acre from the early 1940s until the first decade of the 21st century when concern was being expressed about reaching limits of photosynthesis. High yields would not be possible without significant applications of fertilizer, particularly nitrogen fertilizer which was made affordable by the Haber-Bosch ammonia process.[25] Nirogen fertilizer is applied in many parts of Asia in ammounts subject to diminishing returns,[25] which however does still give a slight increase in yield. Crops in Africa are in general starved for NPK and much of the world's soils are deficient in zinc, which leads to deficiencies in humans.

The greatest period of agricultural productivity growth in the U.S. occurred from World War 2 until the 1970s.[26]

Land is considered a form of capital, but otherwise has received little attention relative to its importance as a factor of productivity by modern economist, although it was important in classical economics. However, higher crop yields effectively multiplied the amount of land.

8. New materials, processes and de-materialization

Production of steel and other metals was limited by the inability to produce sufficiently high temperatures for melting. An understanding thermodynamic principles such as recapturing heat from flue gas by preheating combustion air resulted in higher energy efficiency and higher temperatures. Preheated combustion air was used in iron production and in the Siemens-Martin furnace. Today many industrial processes use preheated combustion air for fuel economy.

The Bessemer (Ptd.1855) and the Siemens-Martin (ca. 1865) processes greatly reduced the cost of steel. Steel has much higher strength than wrought iron and allowed long span bridges, high rise buildings, automobiles and other items. Steel also made superior threaded fasteners (screws, nuts, bolts), nails, wire and other hardware items. Steel rails lasted 17 times longer than iron rails.[27] Today a variety of alloy steels are available that have superior properties for special applications like automobiles, pipelines and drill bits.

Some of the most important specialty materials are steam turbine and gas turbine blades, which have to withstand extreme mechanical stress and high temperatures.

The size of blast furnaces grew greatly over the 20th century and innovations like additional heat recovery and pulverized coal, which displaced coke and increased energy efficiency.[28]

By the end of the 19th century the Bessemer process was displaced by the open hearth furnace (OHF). After World War II the OHF was displaced by the basic oxygen furnace (BOF), which used oxygen instead of air and required about 35–40 minutes to produce a batch of steel compared to 8 to 9 hours for the OHF. The BOF also was more energy efficient.[28]

By 1913, 80% of steel was being made from molten pig iron directly from the blast furnace, eliminating the step of casting the "pigs" (ingots) and remelting.[20]

As a result of these innovations, between 1920 and 2000 labor requirements in the steel industry decreased by a factor of 1,000, from more than 3 worker-hours per tonne to just 0.003.[9]

After 1950 continuous casting contributed to productivity of converting steel to structural shapes by eliminating the intermittent step of making slabs, billets (square cross-section)) or blooms (rectangular) which then usually have to be reheated before rolling into shapes.[9]

Paper was made one sheet at a time by hand until development of the Fourdrinier paper machine (ca. 1801) which made a continuous sheet. Paper making was severely limited by the supply of cotton and linen rags from the time of the invention of the printing press until the development of wood pulp (ca. 1840s).[2] The sulfite process for making wood pulp was developed in the 1860s and 1870s. Paper made from sulfite pulp had superior strength properties than the previously used ground wood pulp (ca. 1840). The kraft (Swedish for strong) pulping process was commercialized in the 1930s. It is the material that the outer layers of corrugated boxes are made of. Until Kraft corrugated boxes were available, and even for some decades after, packaging consisted largely of wooden crates and boxes. Corrugated boxes required much less labor to manufacture and offered good protection to their contents.

Plastics can be inexpensively made into everyday items and have significantly lowered the cost of a variety of goods including packaging, containers, parts and household piping.

Seismic exploration, beginning in the 1920s, uses reflected sound waves to map subsurface geology to help locate potential oil reservoirs. This was a great improvement over previous methods, which involved mostly luck and good knowledge of geology, although luck continued to be important in several major discoveries. Rotary drilling was a faster and more efficient way of drilling oil and water wells. It became popular after being used for the initial discovery of the East Texas field in 1930.

Dematerialization is the reduction of use of materials in manufacturing, construction, packaging or other uses. It is made possible by substitution with better materials and by engineering to reduce weight while maintaining function. Modern examples are plastic beverage containers replacing glass and paperboard, plastic shrink wrap used in shipping and light weight plastic packing materials. Dematerialization has been occurring in the U. S. steel industry where the peak in consumption occurred in 1973 on both an absolute and per capita basis.[28]

Optical fiber began to replace copper wire in the telephone network during the 1980s.

9. Communications

The telegraph appeared around the beginning of the railroad era and railroads typically installed telegraph lines along their routes for communicating with the trains.[29]

Teleprinters (teletype) appeared around 1900 and had replaced between 80 and 90% of Morse code by 1929. It is estimated that one teletypist replaced 15 Morse code operators.[20]

The early use of telephones was primarily for business. Monthly service cost about one third of the average worker's earnings.[9] The telephone along with trucks and the new road networks allowed businesses to reduce inventory sharply during the 1920s.[17]

Telephone calls were handled by operators using switchboards until the 1920s when the automatic (dial) telephone and automatic switchboard came into use, and by 1929, 31.9% of of the Bell system was automatic.[20] The diffusion of telephony to households was mature by the arrival of fiber optic communications in the late 1970s. Fiber optics greatly increased the transmission capacity of information over previous copper wires and greatly lowered the cost of long distance communication.

Communications satellitess came into use in the 1960s and today carry a variety of information including credit card transaction data, radio, television and telephone calls. The Global Positioning System (GPS) operates on signals from satellites.

Fax (short for facsimile) machines of various types had been in existence since the early 1900s but became widespread beginning in the mid 1970s.

10. Home economics: Public water supply household gas supply and appliances

Before public water was supplied to households it was necessary for someone to haul up to 10,000 gallons of water to the average household.[30]

Gas utilities first supplied synthetic gas, mainly for lighting. In the late 19th century natural gas began being supplied to households. This saved many hours of feeding wood fires for heating and cooking.

Household appliances followed household electrification in the 1920s', with consumers buying electric ranges, toasters, refrigerators and washing machines. As a result of appliances and convenience foods, time spent on meal preparation and clean up, laundry and cleaning decreased from 58 hours/week in 1900 to 18 hours/week by 1975. Less time spent on housework allowed more women to enter the labor force.[31]

11. Automation

The concept of the feedback loop to control the dynamic behavior of the system: this is negative feedback, because the sensed value is subtracted from the desired value to create the error signal, which is processed by the controller, which provides proper corrective action. A typical example would be to control the opening of a valve to hold a liquid level in a tank. Process control is a widely used form of automation. A set of six-axis robots used for welding. Robots are used for hazardous jobs like paint spraying, welding and the assembly and soldering of electronics like car radios.

Automation in the original sense means automatic control, meaning a process is run with minimum operator intervention. An simple analogy is cruise control on a car, which applies continuous correction when a sensor on the controlled variable Speed in this example) deviates from a set-point and can respond in a corrective manner to hold the setting. Process control is the usual form of automation that allows industrial operations like oil refineries, steam plants generating electricity or paper mills to be run with a minimum of manpower, usually from a number of control rooms.

Automation of the telephone system allowed dialing local numbers instead of having calls placed through an operator. Further automation allowed callers to place long distance calls by direct dial. Eventually almost all operators were replaced with automation.

Machine tools were automated with Numerical control (NC) in the 1950s. This soon evolved into computerized numerical control (CNC).

Industrial robots were used on a limited scale from the 1960s but began their rapid growth phase in the mid 1980s after the widespread availability of microprocessors used for their control. The diffusion curve of robots went through the build out phase over the next decade with the saturation approach inflection point in the early 1990s.[32] By 2000 there were over 700,000 robots world-wide.[7]

The ultimate objective of atuomation is autonomous machines, that is, machines that run themselves, without operator attention. While this has been achieved to some extent in some industries, in many industries it is necessary to have operators because of the large amount of defective product than can be produced in a short time when things go wrong. Also, operators are necessary for safety and protection of valuable equipment.

12: Computers, semiconductors, data processing and information technology

Early IBM tabulating machine

Early electric data processing was done by running punched cards through tabulating machines, the holes in the cards allowing electrical contact to increment electronic counters. Tabulating machines were in a category called unit record equipment, through which the flow of punched cards was arranged in a program-like sequence to allow sophisticated data processing. They were widely used before the introduction of computers.

The usefulness of tabulating machines was demonstrated by compiling the 1890 U.S. census, allowing the census to be processed in less than a year and with great labor savings compared to the estimated 13 years by the previous manual method.

The first digital computers were more productive than tabulating machines, but not by a great amount. Early computers used thousands of vacuum tubes (thermionic valves) which used a lot of electricity and constantly needed replacing. By the 1950s the vacuum tubes were replaced by transistors which were much more reliable and used relatively little electricity. By the 1960s thousands of transistors and other electronic components could were being manufactured on silicon semiconductor wafers as integrated circuits, which are universally used in today's computers.

Computers used paper tape and punched cards for data and programming input until the 1980s when it was still common to receive monthly utility bills printed on a punched card that was returned with the customer’s payment.

In 1973 IBM introduced point of sale (POS) terminals in which electronic cash registers were networked to the store mainframe computer. By the 1980s bar code readers were added. These technologies automated inventory management. Wal-Mart was an early adopter of POS.

Data storage became better organized after the development of relational database software that allowed data to be stored in different tables. For example, a theoretical airline may have numerous tables such as: airplanes, employees, maintenance contractors, caterers, flights, airports, payments, tickets, etc. each containing a narrower set of more specific information than would a flat file, such as a spreadsheet. These tables are related by common data fields called keys. Data can be retrieved in various specific configurations by posing a query without having to pull up a whole table. This, for example, makes it easy to find a passenger's seat assignment by a variety of means such as ticket number or name.

Since the mid 1990s, interactive web pages have allowed users to access various servers over Internet to engage in e-commerce such as online shopping, paying bills, buying stocks, managing bank accounts and renewing auto registrations. This is the ultimate form of back office automation because the transaction information is transferred directly to the database.

Computers also greatly increased productivity of the communications sector, especially in areas like the elimination of telephone operators. In engineering, computers replaced manual drafting with CAD, with a 500% average increase in a draftsman's output.[7] Software was developed for calculations used in designing electronic circuits, stress analysis, heat and material balances. Process simulation software has been developed for both steady state and dynamic simulation, the latter able to give the user a very similar experience to operating a real process like a refinery or paper mill, allowing the user to optimize the process or experiment with process modifications.

Automated teller machines (ATM's) became popular in recent decades and self checkout at retailers appeared in the 1990s.

The Airline Reservations System and banking are areas where computers are practically essential. Modern military systems also rely on computers.

Computers did not revolutionize manufacturing because automation, in the form of control systems, had already been in existence for decades, although they did allow more sophisticated control, which led to improved product quality and process optimization. See: Productivity paradox

Secular decline in productivity growth

"The years 1929-1941 were, in the aggregate, the most technologically progressive of any comparable period in U.S. economic history." Alexander J. Field[33]

U.S. productivity growth has been in long term decline since the early 1970s.[34][35] Part of the early decline was attributed to increased governmental regulation since the 1960s, including stricter environmental regulations.[36] However, most of the decline in productivity growth is due to exhaustion of opportunities. Robert J. Gordon considered productivity to be "One big wave" that crested and is now receding to a lower level, while M. King Hubbert called the phenomenon of the great productivity gains preceding the Great Depression a "one time event."[37][38]

U.S. GDP growth has never returned to the 4% plus rates of the pre-World War 1 decades.[39]

The computer and computer like semiconductor devices used in automation are the most significant productivity improving technologies developed in the final decades of the twentieth century; however, their contribution was disappointing. Economist Robert J. Gordon is among those who questioned whether computers lived up to the great innovations of the past, such as electrification.[40] This issue is known as the Productivity paradox. Gordon's analysis of productivity in the U.S. gives two possible high points, one between World War 1 and World War 2 and the other between the 1920s and the early post World War 2 decades, depending on how government capital is treated.[37]

Whereas lack of knowledge of scientific principles and efficient work methods was the norm before the mid-19th century, today we have trained professionals in civil, structural, mechanical, chemical, electrical, industrial and other fields of engineering, computer science, information technology, medicine and medical technology and management and business. Opportunities to improve productivity are no longer overlooked and incremental improvements are made wherever possible, but rarely do they create dramatic savings that can be widely applied throughout the economy.

Typically productivity gains are highest in the early years of a new technology or product. The development of the steam engine is rather unique because there was no knowledge of thermodynamics until after Watt's improvements, so it took over 50 years from the time of the Newcomen engine (1712) until Watt's condenser and other improvements increased efficiency by 400% ca. 1765. The study of the steam engine and the simultaneous development of thermodynamics led to continued improvements, at a decelerating rate, until efficiency approached theoretical limits in the 1960s with high pressure steam turbines.[41]

Another example of productivity increases with a new process is a new, mechanized factory producing light bulbs that started operating in 1925. After six years of operation output per worker hour increased fivefold.[42]

The early automobile industry struggled with producing enough automobiles to achieve economies of scale that were thought to be necessary to bring costs down so as to be affordable. Ford Motor Co. solved the problem with a totally new manufacturing concept which became known as mass production. The amount of labor, and consequently the price of the Ford Model T did fall dramatically after the development of the assembly line in 1914, and further with the factory designed for mass production, but after those new processes productivity gains were much slower.[43]

The recent example of high productivity in a new industry occurred in the computer and related industries in the late 1990s, during which time computer related industries were responsible for most of the overall productivity growth.[33]

Diminishing marginal returns on technology

The 99.9% reduction in labor required to produce steel (Item 7 above) between 1920 and 2000 is an example of the exhaustion of savings opportunities. Exhaustion or saturation limits can be illustrated by the logistic function, discussed in the International Institute for Applied Systems Analysis (IIASA) work of Cesare Marchetti, and by Carlota Prez and others.[44] Most basic materials, agricultural commodities, automobiles and appliances are like the steel example in that by far the greatest amount of labor has already been saved so that removing the remaining labor would result infinitely high output per hour in terms of physical product but would only slightly lower cost.

The largest productivity gains in absolute and relative terms typically occurred soon after the introduction of a new technology or product. Examples include the assembly line, which came a decade and a half after the manufacturing of automobiles and in the manufacture of electric light bulbs. A modern example is the performance of semiconductors, and in fact, most of the productivity gains of the last decades were in in semiconductor, computer and Internet related industries.

Robert Ayres, Benjamin Warr and Vaclav Smil have all written that the processes for making many basic materials such as steel, aluminum and various chemicals and electricity generation have reduced energy consumption to where it is approaching theoretical minimums.

Resource depletion decreases productivity as more effort in the form of labor, materials and energy are required for extraction and processing. For example, early U.S. onshore oil production yield has shown a consistent decline in the number of barrels of oil produced per foot drilled. Ore grades of copper and other important minerals have significantly declined in concentration, requiring much higher volumes of low grade ore to be handled and processed.[45]

Based on the exhaustion of opportunities and resource depletion, Ayres-Warr (2009) are forecasting that economic growth in developed countries will end sometime after 2030.[11] See: Useful work growth theory

Economic theory that deals with historical long term business cycles and their relationship to technology refers to these cycles as Kondratiev waves. Resource depletion is in the field of ecological economics.

Improvement in living standards

Chronic hunger and malnutrition were the norm for the majority of the population of the world including England and France, until the latter part of the 19th century. Until about 1750, in large part due to malnutrition, life expectancy in France was about 35 years, and only slightly higher in England. The U.S. population of the time was adequately fed, were much taller and had life expectancies of 45–50 years.[46] A vivid description of living standards of the mill workers in England in 1844 was given by Fredrick Engels.[47]

The gains in standards of living have been accomplished largely through increases in productivity. In the U.S. the amount of personal consumption that could be bought with one hour of work was about $3.00 in 1900 and increased to about $22 by 1990, measured in 2010 dollars.[31] For comparison, a U. S. worker today earns more (in terms of buying power) working for ten minutes than subsistence workers, such as the English mill workers that Fredrick Engels wrote about in 1844, earned in a 12 hour day.

As a result of productivity the work week declined considerably over the 19th century.[48] [49] By the 1920s the average work week was 49 hours, but the work week was reduced to 40 hours (after which overtime premium was applied) as part of the National Industrial Recovery Act of 1933. At the time of the Great Depression of the 1930s it was understood that with the enormous productivity gains due to electrification, mass production and agricultural mechanization, there was no need for a large number of previously employed workers. M. King Hubbert, the namesake of peak the oil curve, advocated a four work day in his prescient paper Man Hours and Distribution.[38]

Early productivity data

Data on productivity is not reliable before the 20th century. Most data from before the 20th century comes from more recent attempts at reconstruction, which is the specialty of new economic history.

One of the earlier sources of 20th century productivity data is the 1940 study by the Brookings Institution which gives productivity by major U.S. industries from 1919 to 1939.[50]

John W. Kendrick of the National Bureau of Economic Research published data series on output, labor, inputs and capital for major industry divisions over the period between 1870 to 1953.[51]

See also

Footnotes

  1. ^ [|Marchetti, Cesare] (1978). A Postmortem Technology Assessment of the Spinning Wheel: The Last 1000 Years , Technological Forecasting and Social Change, 13; pp. 91-93. http://www.cesaremarchetti.org/archive/scan/MARCHETTI-079.pdf
  2. ^ a b Febvre, Lucien; Martin, Henri-Jean (1976). The Coming of the Book: The Impact of Printing, 1450-1800. London and Borrklyn, NY: Verso. ISBN 978-1-84467-633-0.
  3. ^ a b c d e f g Wells, David A. (1891). Recent Economic Changes and Their Effect on Production and Distribution of Wealth and Well-Being of Society. New York: D. Appleton and Co.. ISBN 0543724743. http://books.google.com/books?id=2V3qF4MWh_wC&printsec=frontcover&dq=RECENT+ECONOMIC+CHANGES+AND+THEIR+EFFECT+ON+DISTRIBUTION+OF+WEALTH+AND+WELL+BEING+OF+SOCIETY+WELLS&source=bl&ots=ncSpCE9hHa&sig=iPvAvory04aF3HjrUJENkSwFtCw&hl=en&ei=95bDTJC0CoKVnAf-utnpCQ&sa=X&oi=book_result&ct=result&resnum=1&ved=0CBMQ6AEwAA#v=onepage&q&f=false.
  4. ^ a b c d Ayres, Robert U.; Warr, Benjamin (2004). Accounting for Growth: The Role of Physical Work. http://www.iea.org/work/2004/eewp/Ayres-paper1.pdf
  5. ^ Dunn, James (1905). From Coal Mine Upwards: or Seventy Years of an Eventful Life. ISBN 1434468704<The autobiography of James Dunn> James Dunn started working in a mine at age 8 ca. 1843 and describes work conditions and living conditions at the time
  6. ^ Wells, David A. (1891). Recent Economic Changes and Their Effect on Production and Distribution of Wealth and Well-Being of Society. New York: D. Appleton and Co.. p. 416. ISBN 0543724743. http://books.google.com/books?id=2V3qF4MWh_wC&printsec=frontcover&dq=RECENT+ECONOMIC+CHANGES+AND+THEIR+EFFECT+ON+DISTRIBUTION+OF+WEALTH+AND+WELL+BEING+OF+SOCIETY+WELLS&source=bl&ots=ncSpCE9hHa&sig=iPvAvory04aF3HjrUJENkSwFtCw&hl=en&ei=95bDTJC0CoKVnAf-utnpCQ&sa=X&oi=book_result&ct=result&resnum=1&ved=0CBMQ6AEwAA#v=onepage&q&f=false.
  7. ^ a b c d e [|Smil, Vaclav] (2006). Transforming the Twentieth Century: Technical Innovations and Their Consequences. Oxford, New York: Oxford University Press. p. machine tools 173, poultry yield 144.
  8. ^ a b Moore, Stephen; Simon, Julian (Dec. 15, 1999). The Greatest Century That Ever Was: 25 Miraculous Trends of the last 100 Years, The Cato Institute: Policy Analysis, No. 364. http://www.cato.org/pubs/pas/pa364.pdf Fig. 13
  9. ^ a b c d [|Smil, Vaclav] (2005). Creating the Twentieth Century: Technical Innovations of 1867-1914 and Their Lasting Impact. Oxford, New York: Oxford University Press.
  10. ^ Ayres, R. U.; Ayres, L. W.; Warr, B. (2002). Exergy, Power and Work in the U. S. Economy 1900-1998, Insead’s Center For the Management of Environmental Resources, 2002/52/EPS/CMER. http://www.iea.org/work/2004/eewp/Ayres-paper3.pdf
  11. ^ a b Robert U. Ayres and Benjamin Warr, The Economic Growth Engine: How useful work creates material prosperity, 2009. ISBN 978-1-84844-182-8
  12. ^ Ayres, Robert U.; Warr, Benjamin (2006). Economic growth, technological progress and energy use in the U.S. over the last century: Identifying common trends and structural change in macroeconomic time series, INSEAD. http://www.helsinki.fi/iehc2006/papers2/Warr.pdf
  13. ^ Grübler, Arnulf (1990). The Rise and Fall of Infrastructures: Dynamics of Evolution and Technological Change in Transport. Heidelberg and New York: Physica-Verlag. http://www.iiasa.ac.at/Admin/PUB/Documents/XB-90-704.pdf
  14. ^ a b c d McNeil, Ian (1990). An Encyclopedia of the History of Technology. London: Routledge. ISBN 0415147921.
  15. ^ Fogel, Robert W. (1964). Railroads and American Economic Growth: Essays in Econometric History. Baltimore and London: The John Hopkins Press. ISBN 0801811481. Cost is in 1890 gold standard dollars.
  16. ^ a b Constable, George; Somerville, Bob (2003). A Century of Innovation: Twenty Engineering Achievements That Transformed Our Lives, Chapter 7, Agricultural Mechanization. Washington, DC: Joseph Henry Press. ISBN 0309089085. http://www.greatachievements.org/?id=2955.
  17. ^ a b Ayres, Robert (1989). Technological Transformations and Long Waves. http://www.iiasa.ac.at/Admin/PUB/Documents/RR-89-001.pdf
  18. ^ Schmeichen, James A. (1984). Sweated Industries and Sweated Labor. Urbana, Il: University of Illinois Press. pp. 26.
  19. ^ a b c Hounshell, David A. (1984), From the American System to Mass Production, 1800-1932: The Development of Manufacturing Technology in the United States, Baltimore, Maryland, USA: Johns Hopkins University Press, ISBN 978-0-8018-2975-8, LCCN 83-016269 .
  20. ^ a b c d e f g Jerome, Harry (1934). Mechanization in Industry, National Bureau of Economic Research
  21. ^ "Michael Joseph Owens". ASME. May 17, 1893. http://files.asme.org/ASMEORG/Communities/History/Landmarks/5612.pdf. Retrieved 2007-06-21.
  22. ^ Prescott, Edward C. (1997). [http://www.minneapolisfed.org/research/sr/SR242.pdf Needed: A Theory of Total Factor Productivity , Federal Reserve Bank of Minneapolis]. http://www.minneapolisfed.org/research/sr/SR242.pdf
  23. ^ a b White, William J.. "Economic History of Tractors in the United States". http://eh.net/encyclopedia/article/white.tractors.history.us
  24. ^ Sukoo, Kim (1999). [http://soks.wustl.edu/modern_business.pdf The Growth of Modern Business Enterprise in the Twentieth Century , NBER]. http://soks.wustl.edu/modern_business.pdf
  25. ^ a b >Smil, Vaclav (2004). Enriching the Earth: Fritz Haber, Carl Bosch, and the Transformation of World Food Production. MIT Press. ISBN 0262693135.
  26. ^ Moore, Stephen; Simon, Julian (Dec. 15, 1999). The Greatest Century That Ever Was: 25 Miraculous Trends of the last 100 Years, The Cato Institute: Policy Analysis, No. 364. http://www.cato.org/pubs/pas/pa364.pdf Fig 13.
  27. ^ Flint, Henry M. (1868). Railroads of the United States: Their History and Statistics. Philadelphia: John E. Pottter and Company. http://cprr.org/Museum/Iron_and_Steel_Rails.html.
  28. ^ a b c [|Smil, Vaclav] (2006). Transforming the Twentieth Century: Technical Innovations and Their Consequences. Oxford, New York: Oxford University Press.
  29. ^ Constable, George; Somerville, Bob (2003). A Century of Innovation: Twenty Engineering Achievements That Transformed Our Lives, Chapter 9: Telephone. Washington, DC: Joseph Henry Press. ISBN 0309089085. http://www.greatachievements.org/?id=2957.
  30. ^ Constable, George; Somerville, Bob (2003). A Century of Innovation: Twenty Engineering Achievements That Transformed Our Lives, Chapter 11, Water supply and distribution. Washington, DC: Joseph Henry Press. ISBN 0309089085. http://www.greatachievements.org/?id=2952.
  31. ^ a b Lebergott, Stanley (1993). Pursuing Happiness: American Consumers in the Twentieth Century. Princeton, NJ: Princeton University Press. pp. a:Adapted from Fig. 9.1. ISBN 0-691-04322-1.
  32. ^ It is probable that robots are becoming more productive, which accounts for the slowing growth of the robot population
  33. ^ a b Field, Alexander (2004). "Technological Change and Economic Growth the Interwar Years and the 1990s". http://www.econ.yale.edu/seminars/echist/eh04/field-041006.pdf
  34. ^ Kendrick, John (1991). U.S. Productivity Performance in Perspective , Business Economics, October 1, 1991. http://www.allbusiness.com/finance/262030-1.html
  35. ^ [|Field, Alezander J.] (2007). U.S. Economic Growth in the Gilded Age, Journal of Macroeconomics 31
  36. ^ Christainsen and Haveman suggest that federal regulations are responsible for from 12 to 21 percent of the slowdown in the growth of labor productivity in U.S. manufacturing during 1973-77 as compared to 1958-65 (1981, p 324).
  37. ^ a b Gordon, Robert J. (2000). Interpreting the "One Big Wave" in U.S. Long Term Productivity Growth , National Bureau of Economic Research Working paper 7752. http://www.nber.org/papers/w7752
  38. ^ a b Hubbert, M. King (1940). http://www.scribd.com/doc/22289589/Man-Hours-and-Distribution-M-King-Hubbert Man Hours and Distribution , Derived from Man Hours: A Declining Quantity, Technocracy, Series A, No. 8, August 1936. http://www. http://www.scribd.com/doc/22289589/Man-Hours-and-Distribution-M-King-Hubbert
  39. ^ Vatter, Harold G.; Walker, John F.; Alperovitz, Gar (June, 2005). The onset and persistence of secular stagnation in the U.S. economy: 1910-1990, Journal of Economic Issues. http://findarticles.com/p/articles/mi_qa5437/is_n2_v29/ai_n28658086/
  40. ^ Gordon, Robert J. (2000). Does the "New Economy" Measure up to the Great Inventions of the Past? , NBER Working Paper No. 7833. http://www.nber.org/papers/w7833
  41. ^ A few additional percentage points may be gained if a higher temperature rated alloy could be developed for turbine blades; however, this has been the limiting factor for 70 years (McNeil 1990)
  42. ^ Salter, W.E.G (1969 (2nd Edtiion)). Productivity and Technical Change. Cambridge University Press. pp. 5 (footnotes). ISBN 0521095689.
  43. ^ Beaudreau, Bernard C. (1996). Mass Production, the Stock Market Crash and the Great Depression. New York, Lincoln, Shanghi: Authors Choice Press.
  44. ^ [|Perez, Carlota] (2002). Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages. UK: Edward Elgar Publishing Limited. ISBN 1843763311.
  45. ^ Hall, Charles A.S.; Cleveland, Cutler J.; Kaufmann, Robert (1992). Energy and Resource Quality: The Ecology of the Economic Process. Niwot, Colorado: University Press of Colorado.
  46. ^ [|Fogel, Robert W.] (2004). The Escape from Hunger and Premature Death, 1700-2100. London: Cambridge University Press. ISBN 0521808782.
  47. ^ Engels, Fredrick (1892). The Condition of the Working-Class in England in 1844. London: Swan Sonnenschein & Co. pp. 45, 48–53. http://www.fordham.edu/halsall/mod/1844engels.html.
  48. ^ "Hours of Work in U.S. History". 2010. http://eh.net/encyclopedia/article/whaples.work.hours.us
  49. ^ Whaples, Robert (1991, June). The Shortening of the American Work Week: An Economic and Historical Analysis of Its Context, Causes, and Consequences, The Journal of Economic History, Vol. 51, No. 2; pp. 454-457
  50. ^ Bell, Spurgeon (1940). Productivity, Wages and National Income , The Institute of Economics of the Brookings Institution
  51. ^ Kendrick, John W. (1961). Productivity Trends in the United States. Princeton University Press for NBER.

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