General purpose technology

General purpose technologies (GPTs) are technologies that can affect an entire economy (usually at a national or global level).[1][2][3] GPTs have the potential to drastically alter societies through their impact on pre-existing economic and social structures. Examples include the steam engine, railroad, interchangeable parts, electricity, electronics, material handling, mechanization, control theory (automation), the automobile, the computer, the Internet, medicine, and artificial intelligence.

Effect

Initially adopting a new GPT within an economy may, before improving productivity, actually decrease it, due to:

• Time required for development of new infrastructure
• Learning costs
• An obsolescence of old technologies and skills

Impending timeframe to utilize the latent benefits of the new technology is deemed a trade-off.

History of General Purpose Technologies

Economist Richard Lipsey and Kenneth Carlaw suggests that there have only been 24 technologies in history that can be classified as true GPTs.[4] He defines a transforming GPT according to the four criteria listed below:

• It is a single, recognisable generic technology
• Initially has much scope for improvement but comes to be widely used across the economy
• Has many different uses
• Creates many spillover effects

Since their book, more GPTs have been added for the 21st century. A GPT can be a product, a process or an organisational system.

The earliest technologies mentioned by Lipsey and Carlaw occur before the neolithic period and have not been cast as GPTs, however, they are innovations that the other 24 rely upon.

	Classification	Date
Spoken Language	Process	Pre-10,000BC
Clothing	Product	Pre-10,000BC
Mastery of Fire	Process	Pre-10,000BC
Coil Pottery	Product	Pre-10,000BC
Weapons (sharp edged tools)	Product	Pre-10,000BC

GPT	Spillover Effects	Date	Classification
Domestication of plants	Neolithic Agricultural Revolution	9000-8000 BC	Process
Domestication of animals	Neolithic Agricultural Revolution, Working animals	8500-7500 BC	Process
Smelting of ore	Early metal tools	8000-7000 BC	Process
Wheel	Mechanization, Potter's wheel	4000–3000 BC	Product
Writing	Trade, Record keeping	3400-3200 BC	Process
Bronze	Tools & Weapons	2800 BC	Product
Iron	Tools & Weapons	1200 BC	Product
Water wheel	Inanimate power, Mechanical systems	Early Middle Ages	Product
Three-Masted Sailing Ship	Discovery of the New World, Maritime trade, Colonialism	15th Century	Product
Printing	Knowledge economy, Science education, Financial credit	16th Century	Process
Factory system	Industrial Revolution, Interchangeable parts	Late 18th Century	Organisation
Steam Engine	Industrial Revolution, Machine tools	Late 18th Century	Product
Railways	Suburbs, Commuting, Flexible location of factories	Mid 19th Century	Product
Iron Steamship	Global agricultural trade, International tourism, Dreadnought Battleship	Mid 19th Century	Product
Internal Combustion Engine	Automobile, Airplane, Oil industry, Mobile warfare	Late 19th Century	Product
Electricity	Centralized power generation, Factory electrification, Telegraphic communication	Late 19th Century	Product
Automobile	Suburbs, Commuting, Shopping centres, Long-distance domestic tourism	20th Century	Product
Airplane	International tourism, International sports leagues, Mobile warfare	20th Century	Product
Mass Production	Consumerism, Growth of US economy, Industrial warfare	20th Century	Organisation
Computer	Digital Revolution, Internet	20th Century	Product
Lean Production	Growth of Japanese economy, Agile software development	20th Century	Organisation
Internet	Electronic business, Crowdsourcing, Social networking, Information warfare	20th Century	Product
Biotechnology	Genetically modified food, Bioengineering, Gene therapy	20th Century	Process
Business Virtualization	Paperless office, Telecommuting, Software agents	21st Century	Process
Nanotechnology	Nanomaterials, Nanomedicine, Quantum dot solar cell, Targeted cancer therapy	21st Century	Product
Artificial Intelligence	Autonomous car, Inventory robot, Industrial robot	21st Century	Process

Steam engine increased labor productivity annually by 0.34%, IT – 0.6% (in 1995-2005), robotics – 0.36% (in 1993-2007).[5]

General purpose technologies and military and defense-related procurement

In his book, Is War Necessary for Economic Growth?: Military Procurement and Technology Development, Vernon W. Ruttan, Regents Professor Emeritus in the Department of Applied Economics at the University of Minnesota, examines the impact of military and defense-related procurement on U.S. technology development.[6] Ruttan identifies the development of six general purpose technologies:

• Interchangeable parts and mass production
• Military and commercial aircraft
• Nuclear energy
• Computers and semi-conductors
• The Internet
• The space industries

Based on his reading of the histories of these technologies, Ruttan finds that military and defense-related procurement has been a major source of technology development. He believes that the current technological landscape would look very different in the absence of military and defense-related contributions to commercial technology development. However, from his research, Ruttan determines that commercial technology development would have occurred in the absence of military procurement but more slowly, e.g., the aircraft, computer, and Internet industries. He cites nuclear power as an example of a general purpose technology that would not have developed in the absence of military and defense-related procurement.

New general purpose technologies in energy systems transformation

In the book Global Energy Transformation, author Mats Larsson refers to the work of Professor Ruttan and argues that large scale government programs for energy systems transformation will become necessary to drive the development of new energy technologies. Energy efficient technologies and infrastructures will become necessary to drive economic growth in a future situation after peak oil. The task of developing and implementing these technologies on a large scale will be too complex and demanding in terms of resources, for the market to drive this on its own.

Larsson refers to earlier large scale development programs and projects, to support his argument. One is the transformation of US industry to war production during World War II, the second is the Marshall Plan and the third is the Apollo program. A similar government funded program will become necessary to transform global energy systems on a large scale.References

1. Landes, David S. (1976). The Unbound Prometheus: Technological Change and Industrial Development in Western Europe from ... At the University Press.
2. Rosenberg, Nathan (1982). Inside the Black Box: Technology and Economics. Cambridge University Press. ISBN 9780521273671. editions:rcZYDd5BgC0C.
3. Bresnahan, Timothy F.; Trajtenberg, M. (1995-01-01). "General purpose technologies 'Engines of growth'?" (PDF). Journal of Econometrics. 65 (1): 83–108. doi:10.1016/0304-4076(94)01598-T.
4. Lipsey, Richard; Kenneth I. Carlaw; Clifford T. Bekhar (2005). Economic Transformations: General Purpose Technologies and Long Term Economic Growth. Oxford University Press. pp. 131–218. ISBN 978-0-19-928564-8.
5. https://hbr.org/2015/06/robots-seem-to-be-improving-productivity-not-costing-jobs
6. Ruttan, Vernon (2006). Is War Necessary for Economic Growth?: Military Procurement and Technology Development. New York: Oxford University Press. ISBN 978-0-19-518804-2.

External links

• General Purpose Technologies and Economic Growth Edited by Elhanan Helpman.
• Economic Transformations:General Purpose Technologies And Long Term Economic Growth by Richard G. Lipsey, Kenneth I. Carlaw, Clifford T. Bekar
• Usage History of Industrial Robotics from IFR
• Paperless office adoption statistics – 2015
• Installed solar capacity and solar employment growth – 2015