It would seem a given that efficiency-enhancing technologies spread rapidly, seeing as smoother production often leads to higher profits. That’s not always the case, though: A 2008 survey of the past two centuries found that on average, countries have adopted revolutionary technologies such as steel production and electricity 47 years after they were invented. How and why technology spreads—or rather, doesn’t spread—is a bit of a mystery.
For example, why did so many soccer ball factories continue to use an inefficient cutting mechanism when there was a better one out there? That's the question that a team of researchers from Yale, Columbia, and LSE (that's Lahore, not London) tried to answer in a study of Sialkot, Pakistan, where 40 percent of the world's soccer balls are produced.
(How Sialkot got its market share is worth a momentary digression. Its origins as a hub of soccer ball-production date back to British colonial times, when Britons eager to play soccer grew impatient waiting for shipments of balls to arrive by sea. In 1889, a British sergeant asked a Sialkoti saddlemaker to repair his punctured soccer ball, and, pleased with the results, put in an order for a batch of balls to be made. Production took off from there: By 1982, Sialkot-produced balls were used in the World Cup.)
Today, more than 100 firms produce soccer balls in Sialkot, a city of 1.6 million. Since Sialkot faces tight competition from China and East Asia, the team of researchers figured that manufacturers would be hungry for technologies to make their plants more efficient. After happening upon a new manufacturing process that would increase profit margins by about 13 percent—it involved changing the arrangement of pentagons on a sheet of artificial leather in a way that reduced waste—they wanted to know how quickly the method would spread. They introduced it to a control group of firms. They waited.
But after 15 months, only five of the 35 factories in the control group adopted the technology—a rate the working paper calls “puzzlingly low.” So the team put on hold its original question and started investigating why the technology didn’t catch on. They noticed that one firm outside of the control group adopted the new pentagon arrangement, and that the firm did something most others didn’t: What was going on with that one firm? It turns out, that firm paid its workers by the hour, rather than by the ball. The researchers hypothesized that a worker paid per ball might be resistant to trying out a new technology because, in the short run, as they were learning to use it, it would slow down their productivity and decrease their earnings.