Technology and innovation – effects on production

Figure 4-8: Screen shot from Saskatchewan Pulse Growers' website. Accessed September 13, 2016. URL: http://saskpulse.com/research/

Figure 4-8: Screen shot from Saskatchewan Pulse Growers' website. Source: http://saskpulse.com/research/. Permission: This material has been reproduced in accordance with the University of Saskatchewan  interpretation of Sec.30.04 of the Copyright Act.

The image above is a good example of how agricultural organizations seek to improve technologies through research and development to increase their competitiveness.  What this means is that scientists will conduct research to increase total outputs or the quality of the outputs, or both.  The end result is to make more money for the pulse growers.  But there’s more…  Did you notice that the pulse growers’ overall goal is to “assist in the growth of the sustainability of the pulse industry”?  This highlights the overall objective of making the best decisions in business and elsewhere such that we can sustain businesses and economies, our families and socio-cultural traditions, and of course, the environment.

There are many innovative companies that work directly in the agriculture industry, or in related businesses.  The following is a screenshot of a company in the USA that works to promote animal health and productivity.  The example I selected shows you a feed ingredient developed to promote growth in steers.

Figure 4-9: Elanco - a company in the USA that works to enhance animal health and production

Figure 4-9: Elanco - a company in the USA that works to enhance animal health and production. Source: http://www.elanco.us/products-services/beef/improve-feedlot-cattle-weight-gain-efficiency.aspx. Permission: This material has been reproduced in accordance with the University of Saskatchewan  interpretation of Sec.30.04 of the Copyright Act.

Now that you can map the relationship between input and output, how might you illustrate the change to the production function for the Optaflexx® example?  Consider what the output is and how it changes as input increases.

We’ve not yet talked about this, but time can be an input as well.  If we held constant all factors of production except time, we could map total product over time.  It is possible to measure total animal weight (output) over time (input) and measure the average output (weight per year or month), and marginal growth (change in weight over time).

Because capital is also an essential part of production, it’s important to be aware that technological improvements through engineering and design can affect the production process.  Many of you who come from farming backgrounds have likely heard of “precision agriculture” and understand the effects of having a GPS to guide the application of seeds, fertilizer or herbicides, for example.  Having an accurate estimate of the land that has been treated will permit the machine operator to reduce the number of passes thus minimizing overlap.  The outcome will be less waste (not treating the same land twice), and fuel savings from reducing the number of passes.  Also, in the case of fertilizer, the land would be more accurately treated with less change of over- or under-fertilization thereby increasing the output potential per acre or hectare.

Figure 4-10: John Deere website depicting advances in precision agriculture.

Figure 4-10: John Deere website depicting advances in precision agriculture. Source: http://www.cervusequipment.com/johndeeresaskatchewan/. Permission: This material has been reproduced in accordance with the University of Saskatchewan  interpretation of Sec.30.04 of the Copyright Act.

In each case, new technologies enhance the production process: essentially, they change the shape and positioning of the production function.  This is true for developments in soil and environmental sciences, food production, plant breeding, cropping technologies, animal husbandry, etc.