The long-term evolution of technological complexity and its relationship with economic growth

Tom Broekel () and Torben Klarl

No 2427, Papers in Evolutionary Economic Geography (PEEG) from Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography

Abstract: Innovations are widely accepted as fundamental drivers of economic growth by increasing productivity and creating new markets. However, empirical evidence on the long-term relationship between technological progress and economic growth remains scarce, with few studies considering shifts in technologies’ fundamental properties, such as their degree of complexity. Yet, higher levels of complexity are argued to increase technologies’ economic potential, and consequently, ignoring this dimension of technologies provides an incomplete picture of innovations’ growth effects. We address this research gap by exploring the relationship between economic growth and technological complexity over more than 170 years in the United States (US). Utilizing patent data, the concept of the complexity frontier, and partial wavelet analysis, we find that economic growth has not been driven by patented innovation and technological complexity for most of this period. However, since the beginning of the ICT revolution in the 1990s, it has significantly contributed to GDP growth.

Keywords: Innovation; Economic Growth; Technological Complexity; USA; Complexity Frontier; Wavelt Analysis (search for similar items in EconPapers)
JEL-codes: N10 O30 O47 (search for similar items in EconPapers)
Date: 2024-09, Revised 2024-09
New Economics Papers: this item is included in nep-eff, nep-gro, nep-his, nep-hme, nep-ict, nep-ino, nep-sbm and nep-tid
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