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Technology (4): General Purpose Technologies

No one can escape the transforming fire of machines.

Kevin Kelly – New Rules for the New Economy

Not all technologies are created equal. Most – like the self-heating butter knife – fill their own particular niches well enough but never spread beyond them.

But some technologies change the world.

What is a General Purpose Technology (GPT)?

For those who came in late: the term “General Purpose Technologies” describes technologies that have such power and such a range of applications that they come to pervade entire economies and societies, usually bringing significant changes to the structure of those societies over time. GPTs transform productivity and change the distribution of wealth and power, which in turn transforms lifestyles and social relations. The transforming effects of the steam engine, electricity and computerisation are all good examples of GPTs in action.

Who coined the phrase?

The idea seems to have been popularised by Richard Lipsey, Kenneth Carlaw and Clifford Bekar in their 2006 book Economic Transformations: General Purpose Technologies and Long Term Growth, but they draw on Timothy Bresnahan and Manuel Trajtenberg’s 1995 article, General purpose technologies ‘Engines of growth’? and cite Paul A. David, who wrote about “the techno-economic regimes formed around general purpose engines” in a 1989 working paper called The Computer and the Dynamo: The Modern Productivity Paradox in a Not-Too Distant Mirror.*

Why are GPTs important?

These are technologies that turn the world upside down: tribes, nations, and civilisations rise, fall, or reconfigure under their influence, and their impact is measured over centuries. The history of GPTs is the history of humanity’s (unfinished) escape from poverty, and it doesn’t seem like much of an exaggeration to say that the history of GPTs is the history of history.

So GPTs are interesting almost by definition – and also because thinking about them might help us to understand what sorts of things might happen next. Imagine having an understanding of the social and economic impact of steam power at the start of the Industrial Revolution. There might be things you could do – or avoid doing.

Defining General Purpose Technology

So how do we define a GPT? Here’s Lipsey and Carlaw’s definition (via wikipedia):

A transforming GPT

… is a single, recognisable generic technology;

… initially has much scope for improvement but comes to be widely used across the economy;

… has many different uses;

… creates many spillover effects.

… can be a product, process or an organisational system.

The Foundational Five

Both this list and the one that follows are from wikipedia too – I’ve left the links intact. There’s obviously plenty to argue about here, so take these as food for thought and fuel for argument: are the internet and AI their own things, or just branches of computing?

I think the main thing is to imagine (or remember!) a time without these technologies, and the changes they would have brought as they advanced across the world. What would it have been like to be the first person in the tribe who wore clothes? What would a day be like at the frontier of fire?

Spoken LanguageProcessPre-10,000 BC
ClothingProductPre-10,000 BC
Mastery of FireProcessPre-10,000 BC
Coil PotteryProductPre-10,000 BC
Weapons (sharp-edged tools)ProductPre-10,000 BC

The Big 26

Lipsey and friends started with a list of 24 GPTs, so this list has a couple of bonus items.

GPTSpillover EffectsDateClassification
Domestication of plantsNeolithic Agricultural Revolution9000-8000 BCProcess
Domestication of animalsNeolithic Agricultural Revolution, Working animals8500-7500 BCProcess
Smelting of oreEarly metal tools8000-7000 BCProcess
WheelMechanization, Potter’s wheel4000–3000 BCProduct
WritingTrade, Record keeping3400-3200 BCProcess
BronzeTools & Weapons2800 BCProduct
IronTools & Weapons1200 BCProduct
Water wheelInanimate power, Mechanical systemsEarly Middle AgesProduct
Three-Masted Sailing ShipDiscovery of the New World, Maritime trade, Colonialism15th CenturyProduct
PrintingKnowledge economy, Science education, Financial credit16th CenturyProcess
Factory systemIndustrial Revolution, Interchangeable partsLate 18th CenturyOrganisation
Steam EngineIndustrial Revolution, Machine toolsLate 18th CenturyProduct
RailwaysSuburbs, Commuting, Flexible location of factoriesMid 19th CenturyProduct
Iron SteamshipGlobal agricultural trade, International tourism, Dreadnought BattleshipMid 19th CenturyProduct
Internal Combustion EngineAutomobile, Airplane, Oil industry, Mobile warfareLate 19th CenturyProduct
ElectricityCentralized power generation, Factory electrification, Telegraphic communicationLate 19th CenturyProduct
AutomobileSuburbs, Commuting, Shopping centres, Long-distance domestic tourism20th CenturyProduct
AirplaneInternational tourism, International sports leagues, Mobile warfare20th CenturyProduct
Mass ProductionConsumerism, Growth of US economy, Industrial warfare20th CenturyOrganisation
ComputerDigital Revolution, Internet20th CenturyProduct
Lean ProductionGrowth of Japanese economy, Agile software development20th CenturyOrganisation
InternetElectronic business, Crowdsourcing, Social networking, Information warfare20th CenturyProduct
BiotechnologyGenetically modified food, Bioengineering, Gene therapy20th CenturyProcess
Business VirtualizationPaperless office, Telecommuting, Software agents21st CenturyProcess
NanotechnologyNanomaterials, Nanomedicine, Quantum dot solar cell, Targeted cancer therapy21st CenturyProduct
Artificial IntelligenceAutonomous car, Inventory robot, Industrial robot21st CenturyProcess

More on GPTs soon.

See also:

Matt Ridley: 15 principles of innovation
W. Brian Arthur on combinatorial innovation
Seeds (2): bikes, planes and automobiles
Hybrids (2): combinations and connections

*David actually uses the term “general purpose engines,” but the concept is clearly there in his 1989 working paper. If you have an earlier reference, please share it.

I'd love to hear your thoughts and recommended resources...