Friday, June 29, 2012

Macro Innovation - I-O II

So in the last post I suggested that when we analysis innovation effects at the macro level we need to think differently.

At the recent AAAS meeting in Vancouver I surprised to learn the 'plastic cups' we were drinking from were in fact corn starch. I don't know which company they were from but here is a picture of what is possible:
They look like plastic, they feel like plastic and they perform like plastic - except they are compostable.

So what difference would this make to an I-O table. Now I haven't looked into the exact processes of the technology so this is just suggestive at the moment.

(click on image to enlarge).

I have suggested here that the changes in the I-O table would be minimal. Some added agriculture into the plastics industry with some necessary increase in chemical / petroleum products into the ag industry to increase production. The petroleum industry's input into the plastics industry would decrease.

Okay, so to a different example; the digital camera revolution I discussed last time.
So just a note. As it happens - the Canadian I-O table which I am using as an example doesn't have the category 'C33 Medical, precision and optical instruments' populated with data - it is amalgamated with a different category. But that is okay for this example, I have simply highlighted the appropriate cells.

First we need to include not just the B2B but the entire sheet because the impact has been with final consumers.

Chemicals has dropped and with it the entire column of purchases, as well as supplies through to retailers and consumers. Optical devices have increased along with the entire column as more devices include optics.

Finally to some speculation. There has been much talk lately about 3D printing. Now here again this approach can help us think more clearly about the possible effects of such technology and why it become highly problematic to talk sensibly. The big benefit of 3D printing is that it cuts down on waste - additive manufacturing as it is called. That changes the coefficients.

Second it makes manufacturing possibly more local.

I would suggest that at the very least 3D printing at some point has the potential to change the very structure of manufacturing both in what it supplies and how it is supplied and in what it buys.

So in this way I would suggest we can use the structural data we already have but then develop new approaches to analysis that don't take existing structures for granted but begin to layer it with new meaning that represent changes in the operating models of segments of economic activitiy.

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