I recall that my father had an old 16 millimeter movie camera and used it quite a bit for vacations, family events and fun times. And whether he had formal “directed” shots or informal “documentary” filmings, he used up the film, had it developed and spliced it together from small snippets into longer “motion pictures.”

Eventually, the old 16 millimeter cameras gave way to the new 8 millimeter cameras, but for awhile they were both available; so, Mom bought Dad an 8 millimeter camera. He tried it for a little while before he finally gave it up. Oddly enough, after that, there were never any more movies made again. What happened?

It was a subtle but powerful change in human capital effects that operate still today and have impacts on business. When you have a technology, no matter how good it is, from welding machines to computers, backhoes and cash registers, it takes time and practice to use them well. That training and practice in how to use a given technology is called “human capital.”

The usual idea, then, is that when the technology changes, you have to change with it and revamp your skills. But it is not always that easy.

Using any device is no mere case of reading and following the directions because you slowly learn the advantages and disadvantages of its potential. You discover subtle ways to create exceptional effects with that technology, and that in turn produces excellence and quality in your product or service. You master the technology through experience, trial and error, and even mentoring in order to extract the highest quality work from that particular piece of technology.

When the technology changes, not only is it a matter of figuring out how to turn on and use the new technology, but you will be frustrated by all of the critical effects that you were able to achieve with the old technology, but which you cannot immediately figure out how to do with new technology. And indeed, often, the new technology cannot even give you the subtle quality effects that the old technology gave. The new technology may offer something better, perhaps, but our frustration over the loss of the old effects makes the new ones appear less beneficial.

Faced with a lack of knowledge of how to draw out the effects of the old technology when using the new, some people give up. They realize that a given decisive quality of work may require more effort than before or cause other negative effects to attain the same level of achievement making the new technology less important.

There are three choices: 1) Learn the new technology and change to use it (the choice of the young); 2) Give up entirely and not use any of the technologies and retire (the choice of the old); and 3) Continue to use the old technology for as long as you can create value, that is as long as you can create a value higher than your costs (the choice of the wise).

The last choice isn’t wise in the sense it is the best choice, only wise in the sense that you will only choose it if you know what your human capital sunk costs and sunk values really are. In other words, only the wise will know if choice No. 3 is better or worse than choice No. 1 and No. 2.

For example, a 2017 CBS survey found that 46 percent of families still had landline phones. Some said it is comforting to have a device just for calls without “all of the irritating bells and whistles of smart phones,” and where they can shut the cell phone off and still have a landline if someone needs to call. Also, you can call relatives and talk to two people at once from separate phone extensions, and be able to hear well, and also not have the irritating effect where when two people speak at once, neither one can hear the other.

In business, sometimes, it may be better to keep using old technologies rather than new ones if you can continue to obtain high value from the old. Business isn’t always about being on the ground floor of the new rocket launch into the future.

Ever the adventurer and having spent time in the military in Alaska in the 1950s, Dad vacationed here in the 1970s, visited his nephew at Eielson and filmed the UAF campus, including our School of Management’s Bunnell Building and my current office window.

Dr. Douglas B. Reynolds is a professor of Economics at the University of Alaska Fairbanks’ School of Management. He can be contacted at DBReynolds@Alaska.Edu. This column is brought to you as a public service by the UAF Community and Technical College department of Applied Business and Accounting.