Technical Progress and New Logistics Technologies

Abel, I. & Szekely, I. (1989). Technical Progress and New Logistics Technologies. IIASA Working Paper. IIASA, Laxenburg, Austria: WP-89-021

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Abstract

The objective of this paper is to study new developments in logistics technologies as a prerequisite and as a consequence of technical progress in the case of the United States. Logistics is used here to denote all systematic actions aimed at bringing materials form primary producers through all intermediate steps to the end user, i.e. logistics includes transportation, handling, storage, as well as all related information processing.

The rapid growth of transport and communication output or productivity contributes to overall economic growth. The growth and spread of logistics technologies is likely to change the nature of modem economies.

The nature of the effects of new logistics technologies can be characterized by their indirect and overall impact on productivity of the whole economy. By improving the efficiency of the chain from producer to end user it contributes to that part of the growth rate that con not be explained by the increase in capital and labor inputs solely.

This study shows that the unexplained residual of conventional production functions, i.e. the growth accounted to technical progress can be explained, at least partly, by factors expressing changes in logistic structures and their performance.

Using the data given by N.E. Terleckyj (1984), who analyses the growth of the U.S. communication industry, we extend our focus to transport sector as well, and following the traditional line of production literature this paper present estimates concerning the role of logistics factors in explaining the rate of growth.

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