Extension services have a vital role in increasing the rate of take up of productive technologies and techniques. Extension has been a common support service in the agricultural sector for many years. The shorter period over which a more productive technology or technique diffuses through a sector, or economy, the higher the rate of economic growth in real terms.
Microeconomic innovation & macroeconomic impacts
There is a need to weigh the performance impacts of a new technology which might improve an aspect of an activity by in excess of 100%. The overall economic impact depends upon the significance of the activity benefiting in the whole production process. Once the phasing of individual corporate investment cycles, the degrees of impact of a new technologies on overall performance and the levels of appropriate awareness and confidence to apply innovation are combined, the contribution of IT alone to the growth in the United Kingdom economy is around 0.5%-1%.
The need for a broader extension service
Paradoxically, the UK does not have an industrial or manufacturing extension service. Recent studies5 estimate that an effective decision analysis extension service could triple the rate of contribution of IT to the real growth rate of the UK economy.
5 McNeill, H.W., "Extension services for productivity", SEEL, HPC, September, 2009.
The role of extension
The Decision Analysis Initiative (DAI) is organized as an extension service. Extension is an activity of spreading useful information and knowledge about new technologies1 and techniques2 as a proactive means of raising awareness, providing opportunities to assess their worth and to provide guidance in the most appropriate way to use them by those interested in adopting a new or improved practice. The term innovation refers to the process of something being done for the first time3 in a given location. In this context, extension has the role of spreading innovation through geographic space so that an increasing number of people benefit and thereby stimulating a sustained rate of economic growth4 (see the box below).
Extension systems have existed for many years in the agricultural sectors as a system to assist farmers take decisions in a complex environment.
|Economic growth - gains from extension & innovation|
The traditional innovation diffusion curve through an economic sector is shown by the red curve d-c. This shows that the attainment of technological take-up might be around 80% within 18-20 years of its introduction. With a proactive extension service the diffusion curve, shown in blue, can take the form d-i where it takes less time, for example, 10-11 years, to attain the same level of take up; this increased rate of take-up has a direct impact on the real growth rate of the economy.
Low risk pathway
Such economic growth is achieved through the an accelerated rate of adoption of "proven" technologies (state-of-the-art) and therefore represents a low risk pathway to growth.
Diagram adapted from both McNeill, H.W., "Extension services for productivity", SEEL, HPC, September, 2009 and historic analysis in Mansfield, E., "The Economics of Technological Change", pp.99-100, W.W.Norton & Co., 1968.
Sustaining an evolution in behaviour based on improving practice
Extension services do not normally operate on the basis of a one-way "technological-push". They also have a vital role in conveying challenging user circumstances and requirements to those who are concerned with the creation of new technologies or the improvement of existing technologies. Extension services can often become intimately involved in the assessment of promising new techniques by carrying out applied research and evaluation. Quite often experiments can be set up to assess "state-of-the-art" against issues of importance to the likely users of technology. The assessment of applied research and development output is often undertaken in collaboration with extension services so as to present results in a transparent form of use to the potential user; the DAI has such a role.
Demonstration of state-of-the-art
Most innovation arises from the adoption of proven state-of-the-art technologies as opposed to specific activities attempting to advance technology. In this practical environment, "proof of concept" is substituted by a more practical "observation of how it works in practice" based on demonstrations carried out on "pioneer sites". As a result the innovation being contemplated is not a theoretical concept but rather something the potential innovator has seen in operation. As a result of well-conducted demonstrations, the confidence of those contemplating the use of a new technology or technique is enhanced because the assumed risk is lower than might have been imagined if no demonstration had been seen.
Transparency and objectivity
An extension service has the role of introducing an adequate level of transparency and objectivity into the process of assessment of new applications. This supports potential users with a more balanced technical, economic, financial and environmental assessment that can place promotional arguments of commercial systems producers in context. The role of extension is to point out the full range of benefits and costs, and not just the benefits, associated with the adoption of a new process.
Detecting similarities & differences in circumstances
The challenge facing anyone observing a demonstration is to make sure that they understand what is required to emulate what was observed in practice. Is there a need for training? What resources and equipment are required? How much does it cost? More to the point, observers always need to check to see that the circumstances under which a demonstration takes place are the same or similar to their own. If not, to what degree might the performance observed be affected by the specific circumstances of the potential adopter of the innovation? For people to be in a position to decide there is a need for parallel information inputs such as guidelines on what is needed for success, a means of communicating with those who already use the practice and an ability to analyse, in an objective fashion, the demonstration environment and the intended environment in terms of possible differences that might affect outcomes. More details on this aspect are to be found under Online demonstrations. The DAI's approach to the design and implementation of online decision analysis system demonstrations is explained under Demonstration development cycle.
1 Technology is the specific combination of resources, tools and devices used to undertake some action such as producing an industrial product, the processing of information or the production of a crop.
2 Technique is the way in which a given technology is used by a specific person or work group. Quite often people using the same technology can achieve different levels of performance as a direct result of differences in technique. The evolution in technique is a learning process whereby individuals adapt the way they work as they gain more practice (experience) in making using any given technique; technique is constantly evolving.
3 Mansfield, E., "The Economics of Technological Change", pp.99-100, W.W.Norton & Co., 1968.
4 McNeill, H.W., "Planning & Managing Actions to Stimulate Agricultural Efficiency & National Economic Growth", in "Towards a Market-based Privatization Strategy for Hungarian Agriculture", pp. 40-48, Ministry of Agriculture, Budapest, 1993.
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