Innovation and Information in the Industrial Age

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BACKGROUND

Information, to be useful, has to be new information to people who use or whose behavior is influenced by it.


Discuss evolution of information technology and effects on bureaucracy and management. Organizational innovation.

Typewriters, filing cabinets, file folders, staples, paper clips, carbon copies. Ask ChatGPT for fuller discussion.


Writing - Iliad. Hundreds of years as a long oral poem, written down when Greece got an alphabet.


First writing was mostly bureaucratic records, especially tax records, inventories and loan documents.


Printing - permanent record like writing. Huge decrease in the unit cost in time and expense. Making multiple copies.

Tremendous expansion of availability of data, information, and knowledge.


New ways to organize data for organizations - accounting, finance, engineering, technology. Digital technology and the hardware technology it is based on makes multinational corporations and global supply ecosystems possible. Baldwin and production control.


Computer models. Making gathering, organizing, and analyzing data more efficient. (personal experience). AI - computer-based models create new information and models. Innovate.


Invent

Innovate process - create, adopt, adapt, and diffuse.

Continuous process. Stages overlap.


Concentrate on innovative companies and not old, established companies. Not shifts in exogenous factors, many times due to innovation elsewhere in the economy.


Since 2000, half of all Fortune 500 companies have either gone bankrupt, been acquired, or ceased to exist. (See articles)


And over the past six decades, the average life span of an S&P 500 company has plunged from 58 years to 18 years.


At the same time, disruptive innovations are reaching “critical mass” at a faster rate than ever.


For example, it took the landline phone roughly 40 years to hit 40% penetration in America… TV hit the same milestone in 25 years… PCs took around 15 years to reach a similar proportion. The internet did it in under seven years. And smartphones less than four years.


Justin Spittler, Trading with Justin, Nov 26, 2025

AI's adoption even faster.


Value-added pathways for information and innovation are parallel and interact. Organizational innovation based on information systems makes production innovation possible. Now digital twins and real-time simulations.


INFORMATION


Data -> information -> knowledge - > "useful information"

Under useful information - proprietary information of companies

Basis for competitive advantage

Addition of value-adding inputs - computer and manual organization of data (Excel) - theories, hypotheses, models based on information - application of knowledge to start corporation to produce commercial goods and services.


An example - old parish records, US census data.


Information - summarizing data and putting the results in table form. Summary statistics - averages, growth rates, etc. Macro data and information.


PROPRIETARY INFORMATION IS A SOURCE OF COMPETITIVE ADVANTAGE.


INNOVATION


Ideas - invention (research) - development (patents, prototypes) - innovation


Innovation - commercial products and services

Each step as value to the original ideas. Part of the value-added is input of information to reach next stage. Knowledge becomes innovation with application of organization, management models including financial planning, engineering, marketing, etc.

Further step - use new information from experience and knowledge of customers to continue to innovate - better or cheaper products, new products, related products, application of core proprietary knowledge to other markets.


THE BEGINNING OF THE THE INDUSTRIAL REVOLUTION


These posts analyze the factors behind the start of the Industrial Revolution in England and America.  Pre-conditions were important. They illustrate some of the reasons why, in the long run, America was able to continue industrializing better than England, and why England fell behind.







BASIC ECONOMIC CONCEPTS AND THEORY





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