We are continuing our series based on The Goal by Eliyahu M Goldratt and the Theory of Constraints. {This series was co-written with Brad Stillahn.}
“A Technology Gap”
At the recent NTMA conference, Professor Paul Zane Pilzer spoke of the importance of technology in wealth creation, and of a “Technology Gap”. Let’s review a few of his concepts, and then relate it to a process of ongoing improvement.
Here are Pilzer’s Principles of Economic Alchemy:
1. Technology is the major determinant of wealth because it determines the nature and supply of physical resources.
2. The advance of technology is determined mainly by our ability to process information.
3. The backlog of unimplemented technological advances (the “technology gap”) is the true predictor of economic growth for both the individual and society.
Pilzer described his Six Laws of Economic Alchemy:
1. By enabling us to make productive use of particular raw materials, technology determines what constitutes a physical resource.
2. Technology determines our supply of existing physical resources by determining both the efficiency with which we use resources and our ability to find, obtain, distribute, and store them.
3. The rate at which a society’s technology advances is determined by the relative level of its ability to process information.
4. By providing us with new products and processes that change the way in which we live, technology determines what constitutes a need, and hence the nature of consumer demand.
5. Technology determines the level of consumer demand by determining the price at which goods can be sold.
6. The immediate economic potential for an individual, an industry, or a society can be explained by examining the technology gap—the best practices possible with current knowledge versus the practices in actual use.
Related to #6, Pilzer defines a “Ready-to-be-Implemented Technological Advance” (R-I-T) as a fully developed better product or method that is ready to be put to use.
We normally think of technology as something physical, like a machine. But Pilzer’s view of technology is liberating. His fourth law includes “processes that change the way we live”.
There is good news and bad news.
...to be continued.
Here's to maximizing YOUR profits!
Dr Lisa Lang
(c)Copyright 2008, Dr Lisa, Inc. All rights reserved.
