[MUSIC] Can we utilize existing theories and models to make better predictions about impact of technology? Of course we can. Lots of really good theories and models that we could use here, and we should utilize them to make better predictions about the future. These theories and models are based on what has happened historically. They have tried to find some patterns in the historic data, and based on those patterns, these theories and models are derived. And we could use those to compare to what's happening today but also try to predict the future. There's no guarantee that what happened in history will be repeated, but we have seen that over and over again, so it's a good first guess here. We talk about theories about technology, about innovation, and also how technology and innovation influence the economics, society, and so on. But let's first start with some terms here. Technology. Technology comes from Greek, and in essence, it means the science of craft. But one definition is the purposeful application of information in the design, production, and utilization of goods and services, and in the organization of human activities. So it's a rather broad definition. Let's take an example. Let's look at a car. The way we utilize the car can be seen as a technology, as well as the car itself. But we could also talk about technology when we talk about how we organize traffic. Technology could also be part of the car, like the engine, that's kind of one technology. Or even how the engine is produced, like the costing technology. So we have different levels here. And all our technology, and we will look at all those different levels throughout the course. Is technology something new? No, not at all, as you know. We even label our history regarding technology terms. We talk about the Stone Age, the Bronze Age, the Iron Age. And, of course, there's been some really, really important technologies throughout our history, like the fire, or the wheel, the boat, arms, etc. When we talk about the impact of technology, we look into the future. So can we really kind of compare the printing technology of Gutenberg with information technology, etc.? And we can. The basic general theories holds, but we are in a different situation today. It's a more complex situation, everything goes much faster, and so on. But still, it's more or less the same theories we used that we could use for historical examples, present ones, or probably future ones as well. Innovation. So what is innovation then? Well, innovation is defined as the implementation of a new or a significantly improved product, or process, or a new marketing method, or a new organizational method in business practices, workplace organization, or external relation. So the key here is the implementation of a new or a significantly improved product. That's what an innovation is. You may then ask yourself, so what is then the relationship between technology and innovation? It sounds kind of the same. What's the difference here? Are all technologies innovations? Are all innovations based on technology? No, actually not. Some technologies are never implemented so they never become an innovation on a market, practically used. And all innovations are not technology. We do have other types of innovation, like business model innovation, and so on. But in many cases they overlap. So a lot of innovations are, of course, based on new technology. Why do we talk so much about innovation, entrepreneurship, technology in society? And that is based on the impact of the development and economic growth. And it may be an obvious correlation there between our development and growth to technology. But it's actually quite complex and as a research area, is rather young, it's from the 20th century. Before then, the economic system was regarded as a stable system in balance and it dates back to the thinking of Adam Smith and the Invisible Hand. But in the 20th century, they were really starting to look at how technology and innovation did actually made the society development and economy grow. And one of those, that was Joseph Schumpeter, and his work derived from the work of Karl Marx. And Joseph Schumpeter coined a term called creative destruction. And that was a kind of metaphor for how new technology and innovation is influencing the development. And his definition here was the process of industrial mutations that continuously revolutionizes the economic structure from within, continuously destroying the old one, continuously creating the new one. And that is what we are going to look at in this course. We try to find new markets, new industries. We try to see where old ones disappear. And that's where we will find our opportunities and the true impact of new technology. Is there a clear correlation then between technology and economic growth? Well, as said, it's quite complex, but you can see a number of patterns. And one version of this is the work by a Russian scientist, Nikolai Kondratiev, and he looked at how waves of new technology changed society. These waves were about 40 to 60 years, and we talk about the wave of steam technology, the wave of electricity, and in more modern times we have the information technology. So waves that comes in kind of 40 to 60 year that dramatically change our society and make it look quite different after that 40 to 60 year period. Then we may think, well, just throw in some technology and everything is solved and then we solve everything in society and we get this development. Well, it's not that easy. You could ask yourself, is technology here driving new needs or is it so that our needs are driving the development of technology? We talk sometimes about market pull versus technology push, and it's probably neither/or. Probably it's a combination of that new technology is creating new needs, but existing needs are creating development of technology. So it's a kind of never-ending spiral there. But it is a quite complex system, and we will look into this in the coming four lectures. We will look at the dynamics of innovation, diffusion of innovation, disruptive innovation, and we'll also take a wider perspective on this including social, economic aspects when looking at how new technology will change society. So see you then.
