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The Relationship Between Technological Progress and Material Consumption

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Development Patterns of Material Productivity

Part of the book series: Contributions to Economics ((CE))

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Abstract

This chapter revises the role of technological progress plays for material consumption. In this context, eco-innovations are at center stage. Besides product and process innovations, a distinction between end-of-pipe technologies and integrated technologies can be undertaken. There are two forms of associated externalities occurring with eco-innovations: specifically, positive externalities occur due to knowledge spillovers, while negative externalities occur as producers are able to utilize the environment but do not have to bear the full cost associated with the production. As price signals are distorted, the theory of induced innovation suggests that innovation will be more pollution-intensive than it would otherwise be. The theoretical basics of the idea of induced innovation are presented in Sect. 3.2.

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Notes

  1. 1.

    Another complication of the matter arises because some authors differentiate between the terms technological and technical progress, the former referring to the advancement of technological knowledge and the latter to the progress of knowledge that is used in production, i.e., process as well as product innovations; see Walter (1969). Here, however, the two terms will be used interchangeably.

  2. 2.

    Further analyses of induced innovation and energy prices or energy policy can be found, for example, in Popp (2002), Smulders and de Nooij (2003), and Johnstone et al. (2010).

  3. 3.

    For the following, see Walter (1969).

  4. 4.

    Capital cost-induced technological progress does not seem to play a major role in the academic debate. The idea is that an increase in the capital cost may induce technological progress aimed at absolutely reducing the more expensive factor. In contrast to labor cost-induced technological progress, the substitution mechanism taking place does not substitute labor for capital but rather substitutes better and more efficient capital for capital. In the course of this process, it is however possible that new, better capital requires less labor to operate it, so that in the end, the net result may be a relatively labor-saving technological progress; see Walter (1969).

  5. 5.

    See Ruttan (2001) and Walter (1969) for a brief overview.

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Authors and Affiliations

  1. Faculty of Business, Economics and Social Sciences, University of Hohenheim, Stuttgart, Germany

    Larissa Talmon-Gros

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  1. Larissa Talmon-Gros
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Talmon-Gros, L. (2014). The Relationship Between Technological Progress and Material Consumption. In: Development Patterns of Material Productivity. Contributions to Economics. Springer, Cham. https://doi.org/10.1007/978-3-319-02538-4_3

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