Technological Learning, Technological Substitution, and Technological Change

From a simple dynamic model of competition between product lines it is shown that the shape of learning curves has a powerful influence on the dynamics of technological substitution. Learning of both production efficiency and marketing efficiency is considered. It is asserted that both types of learning are important and that the two are complementary. It is further speculated that production learning is probably more important for commodities and situations of low per capita income, whereas market learning gains ascendancy in cases of high income and specialized and diversified product lines. In closing, it is noted that simple competitive models are misleading, first because complementaries and coevolutionary processes are probably as important in the overall development of technology as are competitive processes, and second because optimization of the technological system's parts does not guarantee improvement of the system as a whole