The Innovation and Diffusion Podcast S2 E6: Inventors/Engineers, Directed Technical Change, and the British Industrial Revolution with Walker Hanlon from Northwestern University
Mar 7, 2025
Walker Hanlon, an Associate Professor in Economics at Northwestern University, dives into the fascinating world of the British Industrial Revolution. He explores whether necessity is indeed the mother of invention and discusses theories on directed technical change. Hanlon highlights the crucial role of engineers in this transformative era and examines how increased government intervention emerged from market failures. The conversation also touches on pollution's impact during the revolution and concludes with a playful dinner game featuring iconic inventors.
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Directed Technical Change
- Directed technical change studies how changes in input availability influence innovation.
- It examines whether innovation economizes on scarce inputs or leverages abundant ones.
Scarcity and Innovation
- Older theories linked labor scarcity to innovation, assuming it's hard to substitute labor.
- Modern directed technical change focuses on input substitutability.
US Civil War Cotton Shock
- The US Civil War disrupting cotton supply to Britain tested directed technical change.
- British innovators substituted towards other cottons, impacting relative prices.