Technology and Social Change

Lecture 9: How Technologies Emerge, Evolve, and Transform Society

Bogdan G. Popescu
bgpopescu@tec.mx

Tecnológico de Monterrey

Framing the Problem

A Puzzle to Start

  • Look at that fire extinguisher on the wall
  • Is it a “technology”?
  • Now imagine fire has never existed
  • Is that same object still a “technology”?

The deeper question: What makes something a technology—not just a thing?

What We Usually Mean by “Technology”

  • Artifacts: computers, bridges, engines
  • Methods: manufacturing, surgical techniques
  • Applied science: biotechnology, nanotechnology
  • The collection: “technology advances rapidly”

Arthur’s insight: These are manifestations of something deeper

Learning Objectives

By the end of this lecture, you will be able to:

  1. Define technology as phenomenon exploitation
  2. Explain combinatorial and recursive innovation
  3. Analyze how domains structure innovation access
  4. Connect Arthur’s framework to Polanyi’s crises
  5. Apply these concepts to contemporary change

So What?

If technology is just gadgets, policy is simple—buy more gadgets.

But if technology is a system with internal logic, we need a deeper framework.

Next: Arthur gives us exactly that framework.

Arthur’s Framework

Arthur’s Definition of Technology

“A technology is a means to fulfill a human purpose… a programming of phenomena to our use.”

— W. Brian Arthur, The Nature of Technology (2009, Ch. 2)

Three key elements:

  1. Means — technology is instrumental
  2. Human purpose — exists relative to goals
  3. Programming of phenomena — exploits natural effects

The Concept of “Phenomena”

Phenomenon: A natural effect that is reliable, repeatable, and exploitable

One phenomenon can enable many technologies. Source: Arthur (2009, Ch. 3).
Phenomenon Technologies It Enables
Electromagnetic induction Generators, motors, transformers
Fermentation Beer, bread, antibiotics
Semiconductor properties Transistors, computers, solar cells

Why Phenomena Matter

  • One phenomenon can enable many technologies
  • Not all discoveries reveal exploitable phenomena
  • The gap between observation and exploitation can span millennia
  • Magnetism: observed for thousands of years
  • Electromagnetic induction: understood only in 1831

Key insight: Discovery makes exploitation possible; engineering makes it real

From Phenomenon to Technology

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    A["Natural<br/>Effect"] -->|"Discovery"| B["Understood<br/>Phenomenon"]
    B -->|"Engineering"| C["Harnessed<br/>Technology"]

Science enables discovery; engineering enables exploitation. Source: Arthur (2009, Ch. 2–3).

Case Study: Magnetism to the Electric Motor

  • Natural effect: Magnetism (observed since antiquity)
  • Scientific understanding: Faraday’s laws (1831)
  • First exploitation: Early electric motors (1830s–40s)
  • Domain formation: Electrical engineering (1880s)
  • Cascading technologies: Grid, lighting, telecommunications

2,000+ years between observation and exploitation

Exercise 1: Identify the Phenomenon

Prompt: Choose ONE technology you use daily.

  1. What natural phenomenon does it exploit?
  2. When was that phenomenon first understood?
  3. How long between understanding and exploitation?

Discuss with a partner for 5 minutes.

So What?

Technology begins with nature, not with inventors.

But a single phenomenon doesn’t explain the acceleration of innovation.

Next: The combinatorial principle explains why technology builds on itself.

Combinatorial Innovation

The Combinatorial Principle

“Technologies inherit parts from the technologies that preceded them.”

— Arthur (2009, Ch. 1)

Key insight: New technologies are built from existing technologies

  • Innovation is recombination, not creation from nothing
  • The “lone genius” myth obscures combinatorial reality
  • More existing technologies → more possible combinations

Anatomy of the Automobile

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    A["Internal<br/>Combustion<br/>Engine"] --> E["Automobile"]
    B["Wheel &<br/>Axle"] --> E
    C["Steering<br/>Mechanism"] --> E
    D["Transmission<br/>System"] --> E
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    style E fill:#4a7c6f,stroke:#334155,color:#fff

Every component was itself a prior technology. Source: Arthur (2009, Ch. 1).

The Recursive Structure

Technologies create conditions for further technologies:

  1. New technologies provide new components for combination
  1. New technologies reveal new phenomena to exploit
  1. New technologies create new problems requiring solutions

“Technology creates itself out of itself.” — Arthur (2009, Ch. 9)

The Innovation Cycle

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    A["Existing<br/>Technologies"] -->|"Combine"| B["New<br/>Technology"]
    B -->|"Provides new<br/>components"| C["Expanded<br/>Toolbox"]
    C -->|"Enables"| A
    B -->|"Reveals new<br/>phenomena"| D["New<br/>Possibilities"]
    D -->|"Feeds back"| A
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Innovation is self-reinforcing: more technology enables more technology. Author’s illustration.

Technology Adoption Accelerates Over Time

Structural Deepening

Technologies grow more complex by solving edge cases:

  1. Core technology works in ideal conditions
  2. Real conditions create problems and exceptions
  3. New components are added to handle these
  4. Technology becomes robust but more complex

Example: Early cars had few parts; modern cars have 30,000+ components

Path Dependence and Lock-In

  • Existing technologies shape what can exist next
  • Early choices constrain later possibilities
  • Mature technologies resist displacement
  • Switching costs often exceed improvement benefits

Classic case: QWERTY persists not because it is optimal, but because of the installed base (David, 1985)

So What?

Technology builds on itself—innovation accelerates through combination.

But who gets to combine depends on knowledge and resources.

Next: Technology “domains” structure who can innovate—and who cannot.

Technology Domains

What Are Domains?

Domain: A cluster of technologies sharing phenomena and methods

Each domain has:

  • Vocabulary: Available components and devices
  • Grammar: Rules for combining vocabulary elements

Key insight: Expertise rarely transfers across domains

Domain Examples: Electronics vs. Biotech

Electronics:

  • Vocabulary: transistors, resistors, circuits
  • Grammar: Ohm’s law, Boolean logic

Biotechnology:

  • Vocabulary: enzymes, cell cultures, genes
  • Grammar: molecular biology, gene expression

Knowing electronics grammar does not help with biotech problems

Time to Market Varies by Domain

Why Places Specialize

Why does Silicon Valley do software while Boston does biotech?

  • Knowledge accumulates locally over time
  • Domain-skilled workers cluster geographically
  • Specialized suppliers co-locate nearby
  • Universities and labs specialize by domain
  • Tacit knowledge transfers through proximity

This is path-dependent: early advantages compound (Saxenian, 1994)

Domain Boundaries and Innovation

Most innovation happens within domains:

  • Incremental improvements using existing vocabulary
  • New combinations of existing components

But breakthroughs often emerge at boundaries:

  • Combining knowledge from multiple domains
  • Bioinformatics = biology + computation
  • Fintech = finance + software

Exercise 2: Domain Analysis

Prompt: Compare TWO technology domains (e.g., AI vs. renewable energy).

  1. What vocabulary and grammar does each require?
  2. What barriers exist for newcomers in each?
  3. Where might cross-domain innovation happen?

Discuss in small groups for 5 minutes.

So What?

Domains explain why different places innovate differently.

But technology doesn’t evolve in isolation—it reshapes economy and society.

Next: How technology and economy co-evolve, and when this triggers crisis.

Co-evolution and Social Change

Economy and Technology Co-evolve

“The economy creates the atmosphere in which technologies develop, and the technologies in turn alter the economy.”

— Arthur (2009, Ch. 9)

  • Technology → Economy: new products, changed costs
  • Economy → Technology: demand signals, investment
  • Neither determines the other—they evolve together

The Co-evolution Loop

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    A["Technology<br/>System"] -->|"Creates products,<br/>changes costs"| B["Economic<br/>Structure"]
    B -->|"Demand signals,<br/>investment"| A
    B -->|"Disrupts jobs<br/>& communities"| C["Social<br/>Order"]
    C -->|"Regulation &<br/>counter-movements"| B
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    style B fill:#b7943a,stroke:#334155,color:#fff
    style C fill:#b44527,stroke:#334155,color:#fff

Technology, economy, and society form an interconnected system. Author’s illustration.

Bridge to Polanyi

Polanyi’s The Great Transformation (1944) provides the crisis framework:

  1. Economy is “embedded” in society
  2. “Disembedding” creates social destruction
  3. Society responds with counter-movements
  4. This “double movement” reshapes political orders

The Double Movement

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    A["Market<br/>Expansion"] -->|"Commodifies labor,<br/>land, money"| B["Social<br/>Disruption"]
    B -->|"Generates<br/>resistance"| C["Counter-<br/>Movement"]
    C -->|"Regulation &<br/>protection"| D["Re-embedding"]
    D -->|"Constrains"| A
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Polanyi’s double movement is a recurring historical cycle. Source: Polanyi (1944).

When Change Becomes Crisis

Connecting Arthur to Polanyi:

When technological change enables rapid economic reorganization:

  • Workers displaced faster than retraining allows
  • Communities lose their economic base
  • Existing protections become inadequate
  • Political counter-movements emerge

Historical parallels: Industrial Revolution (1780s–1840s), Second Industrial Revolution (1870s–1930s)

Between Determinism and Construction

  • Determinism: Technology has its own inexorable logic
  • Social construction: Technology reflects social choices
  • Arthur’s position: Neither extreme is correct

Technology has internal logic (combinatorial, recursive)…

…but develops in response to social needs and contexts

Polanyi’s question: Can society control the pace of change?

Exercise 3: Applying Polanyi Today

Prompt: Choose a current technology (AI, gig platforms, social media).

  1. What “disembedding” effects has it produced?
  2. What counter-movements have emerged?
  3. Is re-embedding happening? How?

Discuss in small groups for 5 minutes.

So What?

Technology is not neutral—it reshapes social arrangements.

Understanding how it evolves helps us anticipate when crises emerge.

Next: Let’s synthesize everything into an analytical toolkit.

Synthesis

Key Takeaways

  1. Technology is phenomenon exploitation—not gadgets
  2. Innovation is combinatorial and recursive—self-accelerating
  3. Domains structure who can innovate—geography, capital, expertise
  4. Technology and economy co-evolve—neither determines the other
  5. Rapid change triggers Polanyian crises—counter-movements emerge

The Analytical Template

When analyzing any technology, ask:

  1. What phenomena does it exploit?
  2. What prior technologies does it combine?
  3. What domain(s) does it belong to?
  4. What new possibilities does it create?
  5. What social disruptions might it cause?
  6. Who wins and who loses?

Return to the Puzzle

Remember the fire extinguisher?

Now you can answer:

  • It exploits chemical fire suppression phenomena
  • It combines pressure vessels, chemical agents, valves
  • Without fire, it exploits no phenomenon—just metal

Technology is a relationship between artifact and phenomenon

Looking Ahead

  • This framework recurs throughout the course
  • Next lecture: specific cases of technological change
  • Core skill: applying the analytical template

References

References

Arthur, W. B. (1994). Increasing returns and path dependence in the economy. University of Michigan Press.

Arthur, W. B. (2009). The nature of technology: What it is and how it evolves. Free Press.

Comin, D., & Hobijn, B. (2010). An exploration of technology diffusion. American Economic Review, 100(5), 2031–2059.

David, P. A. (1985). Clio and the economics of QWERTY. American Economic Review, 75(2), 332–337.

Mokyr, J. (2002). The gifts of Athena: Historical origins of the knowledge economy. Princeton University Press.

Polanyi, K. (1944). The great transformation: The political and economic origins of our time. Farrar & Rinehart.

Saxenian, A. (1994). Regional advantage: Culture and competition in Silicon Valley and Route 128. Harvard University Press.

Schumpeter, J. A. (1942). Capitalism, socialism and democracy. Harper & Brothers.