Technovation 68 (2017) 1–3

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Technovation
journal homepage: www.elsevier.com/locate/technovation

Editorial

E=mc2: Material and energy innovation as a basis for economic growth – MARK

Thoughts for scientists and engineers

A B S T R A C T

Theories that consider technology as the basis for economic growth focus on products – fundamental innovations.
These theories have created much interest due to their ability to explain many economic events. However,
technology-based long wave theories have been the subject of much criticism by traditional economists. Many of
these concerns are addressed by changing a focus on products to engineering materials and forms of energy that
are critical for the success of the fundamental innovations. Changing the focus from product to materials and
energy not only addresses concerns of economists, but provides insights to scientists and engineers on the de-
velopment of materials and energy and the management of research throughout the lifecycle of engineered
materials and forms of energy.

While product innovation is historically linked to increases in economic and social benefit (Van Gelderen, 1913; Kondratieff, 1984; Schumpeter,
1939; Kuznets, 1953; Rostow, 1960; Forrester, 1981), the critical contribution of energy and engineering materials have been overlooked. Without
the presence of new materials, the fundamental innovations credited for far reaching economic growth are unlikely. By considering the role of
engineered materials and the role that new forms of energy play, better insight into theories of economic growth occur. Not only does a focus on
materials and forms of energy address many of the criticisms associated with these economic theories, but allows us to better manage the devel-
opment and lifecycles of new materials and forms of energy. This is important to science and engineering research, commercialization, and existing
physical plant. It also has implications to how government and standards organizations regulate and encourage research and innovation in materials
and energy.
In summary, Long Wave Economic Theory suggests that a fundamental innovation (Table 1) is responsible for tremendous economic growth and
benefit through the direct and indirect application of related minor or derivative innovations. For example, the steam engine allowed for powering and
automating machines and processes in the absence of fast running water – providing a new and flexible power source. The direct and indirect
utilization of steam engines is often credited as the basis of the industrial revolution. A more recent example - the transistor - provided a reliable
switch to replace vacuum tubes and enable rapid advances in electronics and information communication technology. While the technologically-
based long wave theory is engaging, the selection of fundamental innovations and the adherence to a 60-year lifecycle of growth and decline is
problematic (Freeman, 1983; Kleinknecht, 1984; Ayres, 1990).
Considering the central role of materials and energy, increases the explanatory power of existing theory and offers important insights into the
lifecycle of materials and energy. Fundamental innovations adhere to a pattern of a period of accelerated growth, followed by maturation and decline.
Each fundamental innovation listed in Table 1 is directly based on the use of either a new or underutilized engineering material or form of energy.
Furthermore, the application of engineered materials and new forms of energy lead to new fundamental innovations. Additional economic benefit is
obtained from the synergistic interaction of existing fundamental innovations (Table 1). The result has been an acceleration of the rate in which
economic benefit is obtained. Long wave theory also predicts that as an underlying innovation matures a period of economic stagnation will result –
our recent situation.
Steam engines and transistors are briefly considered to illustrate the above relations. Both the steam engine and the iron – used for its manu-
facture – existed prior to the Industrial Revolution. Both material and invention were useful, but grossly underdeveloped. A change in urgency and
interest resulted from a shortage of wood in England and elsewhere. As wood became more expensive to collect, it was substituted by an alternative
energy form – coal. To mine coal inexpensively required digging deep narrow holes near the point of energy consumption. However, these holes
quickly filled with water. Steam engines provided a reliable way of pumping water out of holes; regardless of depth. The need for energy in the form
of coal, created a need for steam engines. Steam engine production resulted in the need for a better understanding of how to produce iron of
consistent (and better) quality in larger volumes. As the availability of iron and steam engines increased, new applications were determined for both.

https://doi.org/10.1016/j.technovation.2017.11.001

Available online 09 November 2017

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Editorial Technovation 68 (2017) 1–3

Table 1
Fundamental innovations that long economic waves were based on and their associated time
period from various sources (Kondratieff, 1984; Ayres, 1990; Economist, 1999).

Fundamental innovation(s) Time period

Cotton 1790 −1800

Water power, iron, textiles
Steam engine
Steam rail steel 1840–1850
Railway, steel
Electricity, chemistry, internal combustion engine 1890–1900
Petrochemicals, aviation, electronics 1950
Information technology 1990
Digital networks, software, new media

This in part was a result of greater familiarity through use and manufacture, resulting in increased quality and performance characteristics of iron
and steam engines. One of the challenges to Iron production was the need for a sufficiently high processing temperature. Wood and charcoal could
not consistently provide a high enough heat. However, coke -produced by the pre-processing of charcoal- offered the heat needed for reliable
production of high quality iron. This change in process technology supported the ability to produce steel (also listed in Table 1) of better quality in
higher volumes. But also resulted in a new form of energy – gas (Table 1). Furthermore, valuable chemicals from coal tar -a byproduct of gas
production- initiated another economic long wave based on chemistry (Table 1). In summary, unsustainable wood use led to an important or killer
application that resulted in a chain of improvements in iron technology and the development of steam-engine based machinery and automation.
These developments led to greater possibilities for new fundamental innovations – gas, chemicals, and steel. Two of these fundamental innovations
involve materials – steel and chemicals. The other is an alternative form of energy. However, these three innovations had to wait until a killer
application resulted in their development; initiating a new technology long wave cycle. Having briefly described how the expansion of use of pre-
existing materials and technology requires the emergence of a killer application and how engineered materials and forms of energy tend to lead to
each other in a synergistic manner, the transistor is offered as an additional example of a fundamental innovation.
Semiconducting properties were observed over a century before the transistor emerged as a fundamental innovation of great economic importance.
The problem that transformed semiconductors into an underlying innovation was the need for a switch to be used in telephone communications. A
team at Bell Laboratories devised a simple switch – the transistor – a device that depended on the unique electrical properties associated with
semiconducting materials. The transistor – like the steam engine – was a killer application. It not only replaced the need for physical switching and
unreliable inefficient vacuum tubes, but resulted in countless applications associated with digital electronics, computing, information systems and
communications technologies. These two killer applications made economic successes of their associated locations: (1) South Yorkshire production
centre of coal, coke, iron and steel from the mid 18th century well into the 20th century, and more recently (2) Silicon Valley for electronics and
information technology.
Having demonstrated how a killer application leads to the widespread development and use of an existing but underutilized engineering material;
it is worth considering the implications for the development, characterization, and utilization of new materials. Historically, a significant time lag
exists between the discovery/initial use of a material and the emergence of a killer application. The killer application is critical to a material's
development as it creates a sustainable market for material of consistent quality. In the absence of demand for significant volumes of the material;
there is a lack of general awareness of the material and its capabilities. More importantly, a supply chain to provide material of consistent quality at a
reasonable price is absent prior to the emergence of a killer application. With increasing production experience and interaction with users of the killer
application, the ability to produce the material improves. This not only leads to greater market opportunities for the killer application, but also
alternative uses for the material and/or killer application. As demand for product and experience with material production increases, observations are
made allowing for a reduction in production costs while improving consistency of the material and obtaining different sets of desirable properties.
This process of learning over time moves from improvement through careful observation, experimentation and serendipitous accidents to the
development of a scientific understanding of the underlying principal allowing for selection of desired properties for different applications and uses.
Once this stage is reached, the development of new economic growth opportunities decline. A common mistake late in the cycle is to not recognize
the declining benefits and over invest in Research and Development. One approach that has worked well in practice has been to focus on different
outcomes as an engineering material matures – reduction of various inputs, amplification or development of new outputs, or the development of
byproducts. For the material scientist and engineer who are developing new materials, what is critical is to clearly state the set of properties that
make the material different from existing materials and to look for applications that will benefit from this specific set of properties. Furthermore,
during the development and characterization of materials the theoretical maximum of the potentially interesting properties should be assessed and
approximated. In doing so the acceleration of the identification of what existing problems could be addressed by a new material will occur, and the
likelihood that the new material be supported in terms of utilization, continuing research and development of a robust supply chain increases.
The brief discussion of iron indicated how the maturation of the production process resulted in an increase in accessibility of forms of energy and
materials that would later become fundamental innovations – more specifically: steel when carbon is added to iron and very desirable different
properties by adding other alloying elements to steel such as nickel and manganese. The journey of learning and improvement can lead to other
forms of energy – gas from coke – or other materials in the form of byproducts, serendipitous accidents, and curiosity driven experimentation. The
critical take away is that theories linking economic growth to innovation can be mistakenly perceived as driven by products, the foundation for
economic growth are new engineering materials and forms of energy that underlie the products we use.

Acknowledgement

This study was conducted within the framework of the Basic Research Program at the National Research University Higher School of Economics
(HSE) and supported within the framework of implementation of the HSE 5–100 Program Roadmap.

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Editorial Technovation 68 (2017) 1–3

References

Ayres, R.U., 1990. Technological transformations and long waves. Technol. Forecast. Soc. Change 37, 1–37.
Economist, 1999. Catch the wave. The Economist, Feb. 18th, Article 186628.
Forrester, J., 1981. Innovation and economic change. Futures 13, 323–331.
Freeman, C., 1983. The Long Wave And The World Economy. Butterworths, Boston.
Kleinknecht, A., 1984. Prosperity, crisis and innovation patterns. Camb. J. Econ. 8, 251–270.
Kondratieff, N., 1984. The Long Wave Cycle. Richardson and Snyder, New York (Translation from 1926 Russian).
Kuznets, S., 1953. Economic Change - Selected Essays In Business Cycles, National Income And Economic Growth. W.W. Norton, New York.
Rostow, W., 1960. The Stages Of Economic Growth. Cambridge University Press, Cambridge.
Schumpeter, J.A., 1939. Business Cycles - A Theoretical, Historical And Statistical Analysis Of The Capitalist Process. McGraw-Hill, New York.
Van Gelderen, J., 1913. Springvloed beschouwingen over industriele ontwikkeling en prijsbeweging. De Neuwe Tijd, 18(4,5,6).

⁎
Jonathan D. Lintona,b,
a
University of Sheffield Management School, University of Sheffield, Sheffield, UK
b
Science Technology Studies Laboratory, Higher School of Economics, Moscow, Russian Federation
E-mail address: drjdlinton@gmail.com