Technological breakthroughs and productivity growth

Harald Edquist and Magnus Henrekson ()

No 5024, Working Papers from Economic History Society

Abstract: "We investigate productivity growth after three major technological breakthroughs: the steam power revolution, electrification and the ICT revolution. The productivity development after these technological breakthroughs is examined in the light of the theoretical concept of General Purpose Technologies. For the steam power revolution and electrification empirical evidence is based on secondary sources. The ICT revolution is analyzed by the use of sectoral productivity data. The paper focuses on differences and similarities of the productivity development after major technological breakthroughs. The distinction between sectors producing and sectors using the new technology is emphasized. We find that it takes long from the time of the original invention until a substantial increase in the rate of productivity growth can be observed. For the steam engine this was about 140 years (85 if the Watt engine is treated as the original innovation), while it was 40–50 years for electrification and the ICT revolution. We also find evidence of rapid price decreases for steam engines, electricity, electric motors and ICT products. This indicates rapid productivity growth in the industries producing the new technology. However, we cannot find persuasive direct evidence that the steam engine producing industry and electric machinery had particularly high productivity growth rates. For the ICT revolution the highest productivity growth rates are found in the ICT-producing industries. We suggest that one explanation could be that hedonic price indexes are not used for the steam engine and the electric motor. Still, it is likely that the rate of technological development has been much more rapid during the ICT revolution compared to any of the previous breakthroughs."

Keywords: Electrification; General purpose technologies; ICT revolution; Productivity growth; Steam power; Technological breakthroughs (search for similar items in EconPapers)
JEL-codes: N10 O10 O14 O40 (search for similar items in EconPapers)
Date: 2005-04
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Chapter: Technological Breakthroughs and Productivity Growth (2006)
Working Paper: Technological Breakthroughs and Productivity Growth (2006)
Working Paper: Technological Breakthroughs and Productivity Growth (2006)
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