Can general purpose technology theory explain economic growth? Electrical power as a case study

Abstract

Does the concept of General Purpose Technologies help explain periods of faster and slower productivity advance in economies? The paper develops a new comparative data set on the usage of electricity in the manufacturing sectors of the USA, Britain, France, Germany and Japan and proceeds to evaluate the hypothesis of a productivity bonus as postulated by many existing GPT models. Using the case of the diffusion of electrical power in the early twentieth century this paper shows that there was no generalized productivity boost from electrical power diffusion as postulated by many existing GPT models. The productivity gains from this GPT varied widely across economies and industries, suggesting that the power of GPTs to predict aggregate or sectoral growth is limited.

The employment and wage impact of broadband deployment in Canada

“…The Internet is classified as a General Purpose Technology (Jovanovic and Rousseau , Lipsey et al. ), the adoption and productivity benefits of which vary across regions or industries (Ristuccia and Solomou ).…”

Is the Uk Productivity Slowdown Unprecedented?

“…In the case of the Edwardian climacteric, the 10-year difference after 1898 was 5.5 per cent (figure 3). The steam age was coming to an end and electricity had yet to make a significant impact on productivity (Ristuccia and Solomou, 2014). Growth accounting suggests, however, that the impact of steam power on productivity growth extended over a long period of time but never reached the intensity of the peak associated with ICT (Crafts, 2004), with the implication that its waning weighed less heavily at the start of the 20th century than that of ICT in the early 21st century.…”

Pervasive technologies and industrial linkages: Modeling acquired purposes

“…When the establishment of a GPT is not assumed a priori, the resulting prevailing and pervasive upstream technology has to emerge from the competition between upstream technologies for the downstream industries. The reason to look at GPTs from this perspective lies in the definitional underpinnings of the very GPT concept (Field, 2008), which 'has come under growing attack' (Ristuccia and Solomou, 2014) recently. To the authors' knowledge, only the paper by Thoma (2009) takes the same viewpoint as the one suggested in this paper.…”