QUANTITATIVE ANALYSIS OF TECHNOLOGICAL DEVELOPMENT Indicators of technological progress

Technological progress Technological progress is a process that leads to: creation of new or improved methods of production that provide savings, introduction of new and improved products and services, improvement of organization and production management. Technological progress can be observed globally and /or partially.

Technological progress At company level we consider 10 basic components of technological progress: product equipment, materials, energy, R & D, investment, human resources, environmental protection, organization management.

Product Global productivity Bp- gross production Tr- labor costs Tos- costs of fixed and working assets

Global productivity 2000. 2001. 2002. 2003. Bp·106 2695 2134 2787 2980 Tr ·105 953 841 904 810 Tos ·106 1153 1475 1171 1226

Equipment Technical equipment per employee Vos- Value of fixed assets N- Number of employees.

Technical equipment per employee Vos ·106 N 2000 50 250 2001 350 2002 60

Equipment Factor of technological level of equipment P- net product Z- number of employees Po- the average annual fees for employees K- invested funds k- interest that would be received on borrowed funds Q- production increase, as a result of improved capacity utilization

Factor of technological level of equipment Pi·107 Zi·103 pi·103 k Ki·107 Q·106 2000 55 60 30 0.07 20 - 2001 40 25 10 2002 90 70 50 0.08 2003 95 75 35

Energy Electricity consumption per employee Pe- overall electricity consumption N - number of employees

Electricity consumption per employee 2000 1488 13 2001 1184 14 2002 1440 11

R & D Indicator of R & D ratio of income and expenses for R&D P - total income TIR total costs for R&D activities

Indicator of R & D UP·106 TIR·102 2000 4000 450 2001 490 2002 4500 600

Investments Intensity of investments IS- overall investments N- total number of employees

Intensity of investments IS·106 N 2000 1154 16 2001 1235 19 2002 1120 10

Human resources Level of qualifications and qualification structure n- number of employees at appropriate level of expertise N- total number of employees

Qualification structure Production workers KV VK PK NK TOTAL 2000 6 20 4 2 32 2001 5 17 7 33 2002 8 39 10 3 60 2003. 29 1 37

Qualification structure Production workers % KV % VK. % PK % NK. 2000 18,75 62,5 12,5 6,25 2001. 15,15 51,52 21,21 12,12 2002. 13,33 65 16,67 5 2003. 13,51 78,38 2,70 5,41

Qualification structure

Production function Production function is a model that shows a maximum level of output that could be achieved with specific input Global production function Particular production function

Cobb-Douglas Cobb-Douglas form of production function is widely used to represent the relationship of an output to inputs Q=ALα Kβ Q - total production (the monetary value of all goods produced in a year) L – labor input - labor production factor K – capital input - capital production factor A – factor in proportion to production growth and depended on technological progress α – elasticity of production volume in relation to labor production factor β - elasticity of production volume in relation to capital production factor

Rate of technological progress A = emt e – constant t – time m – rate of technological progress Q= emtLα Kβ lnQ = mt + αlnL + βlnK ΔQ/Q = m + α ΔL/L + β ΔK/K m = ΔQ/Q - α ΔL/L - β ΔK/K

Exercise Q(106) L(105) 2000 2588 810 1301 2001 2932 905 1399

Exercise Ratio of factor L to production growth Ratio of factor K to production growth Ratio of factor m to production growth