Assessment 

5
3. Describe the process of technological change. How technological evolution takes place?

Technological change means the technical knowledge used in the production of capital and
machinery. The various changes in technology leads to an increase in the productivity of
labor,capital and other production factors. Technological progress comprises the creation of
skill, new means of production, new uses of raw materials and the widespread use of
machinery. Technological evolve through invention, innovation, imitation and learning and a
distinction drawn between earned and unstated knowledge. The first stage is the advancement
in scientific knowledge, the second is that of the application of this knowledge to some useful
purposes and third is the commercialization of invention which is called innovation. This has a
great significance in the process of development. Schumpeter has distinguished between
invention and innovation. Invention implies the discovery of new technique while innovation is
practical application of invention in production for market. It may be called commercialization
that originates from scientific advancement. Invention is scientific fact while innovation is
economic fact.