The mythology of learning-by-doing in World War II airframe and ship production

International Journal of Technological Learning, Innovation and Development

Volumn 3, Issue 1, 2010, Pages 1-35

  Scott Kemmis, Don ^a   Bell, Martin ^b  

^a UNIVERSITY OF SYDNEY   (Australia)

^b UNIVERSITY OF SUSSEX   (United Kingdom)

Author keywords

climate change policy; endogenous technological change; experience curve; induced technological change; infant industry; innovation; LBD; learning curve; learning by doing

Indexed keywords

EID: 84861510798     PISSN: 17531942     EISSN: 17531950     Source Type: Journal    
DOI: 10.1504/IJTLID.2010.031051     Document Type: Article

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67. Nathan Rosenberg long ago speculated that this might be the case. With reference to the WWII (and other) productivity/experience correlations, he noted that: “It is possible, of course, that cost reductions which have been attributed to learning by doing have actually been due to other factors which have not been correctly identified, especially in cases where learning by doing has been defined as a residual.” (Rosenberg, 1976, p.329).
68. Arrow (1962) also viewed learning as encompassing an extremely wide range of processes, of which the ‘by-doing’ variant was only a narrow subset: D. Scott-Kemmis and M. Bell “It has been assumed here that learning by doing takes place only as a byproduct of ordinary production. In fact society has created institutions, education and research, whose purpose is to enable learning to take place more rapidly. A fuller model would take account of these additional variables.” (p.172, our emphasis)
69. For example, using the terms ‘learning’ and ‘LBD’ interchangeably, Dasgupta and Stiglitz (1988) note that: “Productivity increases are realised not only as a result of the explicit allocation of resources to capital accumulation and research and development, but also often as a by-product of the process of production, that is, learning-by-doing” (p.88 our emphasis). Similarly, Rosenberg (1982) explains that: “…learning by doing …, as described by Arrow and others, consists of developing increasing skill in production”. This “occurs as a by-product of productive activity” (p. 121, our emphasis).
70. As discussed by Rosenberg (1982), this characteristic is important in distinguishing between ‘LBD’ and other learning processes such as ‘learning by using’. In the former, there are no intermediaries in the learning process. Production experience is seen as linked directly to productivity gains via the consequentially increased skill of those who are directly involved in production. In contrast, learning by using involves intermediaries and indirect links between experience and productivity gains. The flow of experience from using capital goods like aircraft or power generating equipment feeds back to the designers of those facilities who incorporate minor improvements into successive vintages of equipment.
71. For example, Arrow (1962) asserted that the ‘steadily increasing performance’ at Horndal ‘can only be imputed to learning from experience’ of the type demonstrated in the WW II airframe studies. (p.156).
72. For example, in his study of textile production in the USA in the 19th century, David (1975) described the ‘Horndal effect’ as productivity growth with ‘fixed facilities’, and asserted that this applied in the case of the WWII studies: “.the early work of Wright and the subsequent systematic studies by Alchian and Asher on the costs of airframe production were also concerned with the fixed facilties case” (p.174). Rosenberg also transfers the Horndal fixed facilities condition to WWII airframe and shipbuilding studies-citing studies by Alchian (1963) and Rapping (1965) on the latter: “There is abundant evidence from a variety of sources showing sustained reductions in real labour costs per unit of output in situations where labor was employed in a plant using unchanged facitlities. Indeed the phenomenon is sufficiently well established that it has come to be known as the ‘Horndal Effect’ … The phenomenon has been further documented in several industries, most notably air-frame production, machine tools, shipbuilding and textiles.” (pp.197–198)
73. For instance, is the learning substantially appropriable by the firms that are the locus of the experience acquisition, or are there significant spillover externalities?
74. For instance, contrasting the merits of direct subsidies for learning vs. the high costs and possibly limited effectiveness of tariff protection.
75. A partial exception is in the recent review by Pack and Saggi (2006). They note that: “The infant industry argument does not really specify how learning occurs. It just assumes that dynamic scale economies will somehow be realized by the infant industry” (p.272). However, although they recognise that firms may have to invest in creating knowledge to realise these gains, they do not develop the issue into a discussion that breaks free from the experience-based, LBD straightjacket.
76. Although, Rosen focused on growth at the level of the firm, he saw his model as very similar to that in Arrow’s macro-level analysis. However, because he questioned Arrow’s assumption about the transferability of learning gains between firms, he focused on the micro rather than the macro (pp.381–382).
77. The Air Material Command, Source Book of World War II Basic data: Airframe Industry.
78. Reflecting on this management behaviour, Zieke (1962) noted the consequent circularity in the apparent accuracy of later curve-fitting estimations: “A final source of accuracy…(in such estimates) … is strange indeed. The tendency of shop level departments to meet scheduled goals regardless of the correctness of the progress slope can lead to validation of the selected slope”.
79. For example, because of the scale of process technologies in such industries, and hence the high costs of pilot plants and other kinds of off-line experimentation, a large proportion of the exploratory work underpinning innovation has to take place ‘on the shop floor’. Records of productivity and investment over time would probably suggest the occurrence of conventional learning by doing - perhaps being even more misleading than usual. As one example, Nilsson (1995) examined the on-site experimentation with production scale facilities that were involved in developing a major new innovation in steel production. He described this kind of learning as ‘innovating by doing’ and noted that it is quite different from the passive activity discussed in the learning by doing literature (p.44).
80. The idea here of learning that necessarily precedes the doing of (improving) production should be distinguished from the notion of ‘learning before doing’ suggested by Pisano (1996). In that case, the term ‘learning’ was used as a kind of portmanteau re-label for activities like “computer simulations, laboratory experiments, prototype testing, pilot productions runs, and other experiments” (p.1097) that were undertaken before initiating the production of new pharmaceutical products. Here, we are taking a step further ‘back’ and using the idea of ‘learning’ to refer to various ways of creating the necessary human resources and other capabilities before being able to undertake those relatively specialised kinds of activity contributing to technical change.
81. Or, as in the case of trade protection, simply subsidising the existence of firms and their ongoing production.