Technological progress towards sustainable development

Technological innovation undoubtedly increases productivity and simultaneously it also creates potential dangers to society, which are unknown at the early phase of the adoption of technology. As soon as externalities are identified, social institutions formulate laws and regulations to arrest harmful externalities. The social institutions create the conditions for innovation. New generation of technology may produce new externalities. Thus, a cyclical pattern arises in which technology first diffuse, then become regulated and finally is phased out by another new technology.