A Simple Example: The Microwave Oven
An example of investment-specific technological progress is the microwave oven. The idea of the microwave came to be by accident: in 1946 an engineer noticed that a candy bar in his pocket had melted while working on something completely unrelated to cooking (Gallawa 2005). The development of this good, from melting the candy bar to the home appliance we know today, took time and the investment of resources to make a microwave small and cheap. The first microwave oven cost between 2000 and 3000 dollars and was housed in refrigerator-sized cabinets (Gallawa 2005)! Today, almost any college student can enjoy a 3-minute microwaveable meal in the smallest dorm room. But a microwave's uses do not stop at the dorm room. Many industries have found microwave heating advantageous: it has been used to dry cork, ceramics, paper, leather, and so on (Gallawa 2005). However, for either college students or firms to reap the benefits of quick warming, they must first "invest" in a microwave oven (that "embodies" the technological advance). To realize the benefits of investment-specific technological progress you must first invest in a technology that embodies it.
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Famous quotes containing the words microwave oven, microwave and/or oven:
“The New Age? It’s just the old age stuck in a microwave oven for fifteen seconds.”
—James Randi (b. 1928)
“The New Age? It’s just the old age stuck in a microwave oven for fifteen seconds.”
—James Randi (b. 1928)
“Occasionally, remind children tactfully that the oven is the only self-cleaning appliance.”
—Fred G. Gosman (20th century)