General purpose technology
General purpose technologies (GPTs) are technologies that can affect an entire economy (usually at a national or global level). 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, and the Internet.
Contents |
[edit] Lag
The introduction of a new GPT to an economy may, before improving productivity, actually decrease it:
- the obsolescence of old technologies and skills
- learning costs
- time required for development of new infrastructure
- readjustment of labor to new industries, causing temporary unemployment
This initial inability to exploit the benefits of the new technology is known as the Solow Paradox. New technology can also be isolating. The internet, originally created for faster communication between people, can cause you to search for someone random and foreign to connect with.
[edit] Government investment necessary to develop new general purpose technologies
In his book "Is War Necessary for Economic Growth?" Economics Professor Vernon W Ruttan of University of Minnesota argues that long term and large scale government investments are important in driving the development of general purpose technologies. Professor Ruttan analyzed the development of general purpose technologies in six areas and found that in all cases government financed projects had contributed to significantly speed up the development of new general purpose technologies, and in one case, nuclear power, the development had not been possible without large scale government funding.
The six areas analyzed and described by Professor Ruttan are:
- The US production system - Aviation technologies - Space technologies - Information technology - Internet technologies - Nuclear power
[edit] 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 the Second World War, 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.
[edit] See also
- 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
