Diffusion of Major Technological Innovations in U.S. Iron and Steel Manufacturing

THE impacts of an innovation on an industry and on larger sectors of the economy clearly depend on how rapidly it comes into use. In appraising such effects, the initial decisions to be made concern the measures to be used and the level of aggregation to be studied. And the choices to be made among the wide range of possible alternatives obviously depend on one's purpose. For example, Lynn's study [i6] of the 'diffusion' of twenty major inniovations was concerned essentially with the growth of new industries rooted in major innovations and hence used the absolute value of outputs and their percentage shares of Gross National Product as measures. In another study [I7, PP. 133 if.], Mansfield was concerned with how rapidly given innovations had spread from enterprise to enterprise in four industries, so he used the percentage of major firms introducing the innovation over a given period as his measure. Neither of these approaches seems to provide a generally applicable basis for assessing the extent to which innovations displace predecessor processes and facilities. Lynn's reliance on total output is clearly inappropriate for established, as differentiated from new, industries.' Mansfield's concern with how many have adopted an innovation clearly ignores the extent of dependence on the innovation, and his concentration on major firms may be open to the possibility of unrepresentativeness-not only because smaller firms may account for significant proportions of output, but also because larger and smaller firms may differ in their responsiveness to innovations [I7, PP. I55 H.]I. The objective of this paper is to assess the rates at which production comes to be dominated by new processes or facilities. Hence, its focus is on tlle industry as a whole and the measure used is the proportion of total output accounted for by the innovation. In particular, the analysis is concentrated on the early rates of diffusion of fourteen