The former CEO Jay H Walder tried to sell the theory of the essence of technological change because it opens up new more efficient ways to produce a product with less labor or capital.
The first impact of technological change then is to reduce the demand for labor, in particular he targeted station agents and booth for removal by installing metro card vending machines with some cameras and the help phone. He used those as what he called them then more advanced labor-saving equipment. Although it may seem counter-intuitive at first technological change is also capital saving in many ways. We are aware of the example that was used then - the railroad industry. Specifically when railroads switched from steam to diesel locomotives the same number of ton miles of freight service could be produced with less capital since diesels required less time for repairs and could operate over much greater distances without refueling. Similarly computers have resulted in substantial savings in capital in the trucking industry since more efficient scheduling permits as well as fewer trucks were needed to haul the same amount of freight.
While technological change frequently reduces both the absolute level of capital and labor needed to produce a particular product the ratio of capital to labor may change if technological change has a factor ‘bias’ - that is if it proportionately reduces the use of one input more than the other.
One factor our former CEO Walder overlooked was that despite the revolution in technology in the 20th century the number of jobs in the economy has not decreased but rather has increased by many millions. How can this be accounted for? He should answer this if he can from Hong Kong, maybe he was a buddy of Mitt Romney in the Bain Capital formula to lay off blue collar employees.
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