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. The archetypal examples of GPTs are the steam engine, electricity, and information technology. Other examples include the railroad, interchangeable parts, electronics, material handling, mechanization, control theory (automation), the automobile, the computer, the Internet, medicine, and artificial intelligence, in particular generative pre-trained transformers.

In economics, it is theorized that initial adoption of a new GPT within an economy may, before improving productivity, actually decrease it,[4] due to: time required for development of new infrastructure; learning costs; and, obsolescence of old technologies and skills. This can lead to a "productivity J-curve" as unmeasured intangible assets are built up and then harvested. [5] Impending timeframe to utilize the latent benefits of the new technology is deemed a trade-off. Spin-out firms/inventors from organizations that had developed GPTs play an important role in developing applications for GPTs. However, it has been observed that the level of cumulative innovation in GPTs diminishes as more spin-outs into application development occur.[6]

  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. ^ Liao, Hailin; Wang, Bin; Li, Baibing; Weyman-Jones, Tom (2016-09-01). "ICT as a general-purpose technology: The productivity of ICT in the United States revisited". Information Economics and Policy. 36: 10–25. doi:10.1016/j.infoecopol.2016.05.001. ISSN 0167-6245. S2CID 26020335.
  5. ^ Brynjolfsson, Erik; Rock, Daniel; Syverson, Chad (2021). "The Productivity J-Curve: How Intangibles Complement General Purpose Technologies" (PDF). American Economic Journal: Macroeconomics. 13: 333–372. doi:10.1257/mac.20180386.
  6. ^ Shimizu, Hiroshi (2019). General purpose technology, spin-out, and innovation: technological development of laser diodes in the United States and Japan. Advances in Japanese business and economics. Singapore: Springer. ISBN 978-981-13-3714-7.