Don’t assume ignorance, sloth, bias or stupidity

The latest in a series of pieces derived from my 1985 PhD.

We often talk about adopting technology, but for all but the simplest of technologies the process is usually one of adaptation. Adaptation requires site specific engineering, the kind of engineering that is unspectacular but essential. Numerous site specific factors drive costs as well as savings, and therefore the economic viability, of any proposed measure. Therefore you cannot assume that a technology that works in one site will work in another site that is in the same sector, or even another site that is ostensibly similar.

The technologies referred to have moved on, (the original did not refer to LEDs but rather compact fluorescents so I have updated that), and the innovation literature references have probably been superceded but the principles remain the same. The fact that a company has not adopted an energy efficiency measure, does not indicate ‘sloth, bias or stupidity’ – even when the technology is regarded as a ‘no brainer’ or ‘low hanging fruit’. In addition, of course, different companies may have different financial criteria for their investments driven by factors such as differing economic performance, financial structure, strategy, shareholder preferences or management approach.

Adoption versus adaptation

In many studies the purchase of technology is often presented as a simple adoption process. In most, if not all, energy efficiency investments, (as well as other areas of technology), the process is more one of adaptation. Even when a concept is well proven and the basic hardware exists some adaptation work is necessary for all but the simplest technologies, to make a viable system in the particular site in question. This requires original, though not dramatic, engineering design work. The basic hardware may well be standard and simple but the system must be engineered to meet the technical conditions and the required economic return at each specific site. The difficulties this can present, and the effect of site specific technical factors on economic viability, have been neglected in the adoption literature.

There is a great variety of energy efficiency technologies available, ranging from LED lamps to sophisticated process heat recovery and electronic energy management systems. Each technique has a degree of adaptability, the inverse of which can be labelled specificity. At one end of the scale, with a high adaptability, would be LEDs which can plug straight into existing fittings. In more complex relighting situations, such as a warehouse where high pressure sodium lamps are to replace fluorescent tubes, considerable adaptation of the existing lighting circuits may be necessary.

A technique with a lower adaptability than low energy lighting would be heat recovery from boiler stacks using economisers. Ostensibly this mature technology (first patented in 1845) looks very adaptable as it can, in principle, i.e. technically, be applied to any gas fired boiler, or dual fuel boiler if a bypass is used during oil firing. Numerous site specific factors affect the financial viability of proposals for boiler economisers, including:

• physical space for the hardware
• load bearing supports
• quantity and quality of demand for hot water
• flue gas temperature and-composition
• boiler utilisation
• boiler load pattern
• time spent burning gas (for dual fuel boilers).

Total system cost, as in other heat recovery projects, is often three times the cost of the economiser or heat exchanger. At two brewery and one dairy sites visited during the research, economisers were not financially viable because of lack of space in the boiler house. Obviously it would have been technically feasible to extend the boiler house but the cost would have been prohibitive. Consequently, the technical potential for energy saving through the use of economisers at these sites is unlikely to be exploited at current prices until a new boiler installation is necessary for other reasons. Applications of commercially available hardware are rarely prevented by purely technical problems but by failure to meet economic criteria.

Specificity

Towards the higher end of the specificity scale, i. e. the least adaptable, would be a process heat recovery system. The number of technical factors affecting financial viability will be substantially higher than a simple boiler economiser.  The determinants of the adaptability are the sensitivities of capital costs and savings to variations in specific technical factors inherent in the technique and the site. The technique of heat recovery from malting kilns using air-to-air heat exchangers has a higher adaptability than say brewery effluent heat recovery systems because the technical factors that affect capital cost and savings, notably physical dimensions, air flow rates, temperatures, tend to be similar between sites. There are only a few basic designs of malting kilns.

On the other hand brewery effluent heat recovery systems have a low adaptability into other brewery sites because their viability is very sensitive to site specific factors such as plant layout and quantities and qualities of effluent (determined by the type and operating conditions of existing plant, as well as production levels and mix).

The importance of specificity is supported by several writers on innovation. Rosenberg (1982) stresses the importance of adaptation and the role of “unspectacular design and engineering activities“. He also notes that in the literature there is frequent preoccupation with what is technically spectacular rather than what is economically significant. Rosenberg also emphasises the importance of studies at the level of the individual firm. Rogers (1962) in discussing the adoption of innovations divides the “antecedents” to the innovation decision into two categories:

(1) perceived attributes of the innovation, and

(2) characteristics of the adopters.

Five attributes can be summarised for the first category:

• Relative advantage
• Compatability
• Complexity
• Trialability
• Observability.

Compatability, “the degree of fit of the innovation with existing norms and needs of potential users“, (Rogers, 1962), subsumes adaptability as well as other factors.

The importance of adaptability, or its inverse specificity (in connection with innovations) is also supported by Boylan (1977), who states:

“The number of firms in an industry which are potential adopters of an innovation, and the proportion of their output to which it might be applied, depends on the functional specificity of the innovation at successive stages of development as well as the range of relevant processes and products in individual plants. Hence, adoption rates cannot properly be compared with the total number of firms in, or the total output of, their common “industry” classification. Rather the progressively changing characteristics of the innovation in its various forms must be accompanied by changing measures of the array of economically feasible applications.”

Gold (1977) notes that it cannot be assumed that the expected benefits of an innovation are so clear that all potential adopters would assess them similarly or even that all potential adopters give serious consideration to the same innovations in any given period. Economic viability in one site does not automatically confer economic viability in a similar site because the costs of adopting the basic hardware into a system can make it not viable. This is true even assuming similar definitions of economic viability. Gold also suggests that:

“the criteria applied to the evaluation of available innovations may differ widely among firms, reflecting differences in their internal urgencies, resource availabilities and specialised expertise rather than deriving solely from the demonstrable benefits of the innovation itself.“

Gold goes on to state: 

“Instead of assuming ignorance, sloth, bias or stupidity as the causes of (such) restrained rates of diffusion, it would be more helpful to make field studies of the actual considerations and evaluations responsible for the decisions made.”

Bradbury (1978) observed that technology:

“is not something that can be bought off the shelf or stored in a bank vault“.

Components of systems may be bought off the shelf but an input or knowledge – engineering – is necessary to design financially viable systems, even where the concept has been used elsewhere.

In conclusion

Understanding technological change and how we use and adopt technology is important for policy makers and practitioners. We should not forget the degree of ‘unspectacular’ engineering that is necessary to adapt technology to a specific situation, and we should not forget the importance of relatively small-scale, unspectacular (and often unseen), incremental technical change – particularly in an age where we tend to focus on large-scale, spectacular innovation. Over time the cumulative effect of incremental technical change can be greater than that of spectacular innovations.

_________________________________________________________________________________________

References

BOYLAN, MG (1977) Reported economic effects of technological change in Research, technological change, and economic analysis.  ed. B Gold, Lexington Books, Lexington Mass.

BRADBURY, FR (1978) The Leverhulme Project at Stirling in technology transfer: implications for the Scottish Economy. TERU Discussion Paper No. 14, Proceedings of Conference held at the University of Stirling, 17 and 18 October 1978.

ROGERS, EM (1962) Diffusion of innovations. Free Press, New York

ROSENBERG, N (1982) Inside the black box: technology and economics. Cambridge University Press