NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

General Purpose Technologies "Engines of Growth?"

Timothy F. Bresnahan, Manuel Trajtenberg

NBER Working Paper No. 4148 (Also Reprint No. r2008)
Issued in August 1992
NBER Program(s):   PR

Whole eras of technical progress and economic growth appear to be driven by a few key technologies, which we call General Purpose Technologies (GPT's). Thus the steam engine and the electric motor may have played such a role in the past, whereas semiconductors and computers may be doing as much in our era. GPT's are characterized by pervasiveness (they are used as inputs by many downstream sectors), inherent potential for technical improvements, and innovational complementarities', meaning that the productivity of R&D in downstream sectors increases as a consequence of innovation in the GPT. Thus, as GPT's improve they spread throughout the economy, bringing about generalized productivity gains. Our analysis shows that the characteristics of GPT's imply a sort of increasing returns to scale phenomenon, and that this may have a large role to play in determining the rate of technical advance; on the other hand this phenomenon makes it difficult for a decentralized economy to fully exploit the growth opportunities offered by evolving GPT's. In particular; if the relationship between the GPT and its users is limited to arms-length market transactions, there will be "too little, too late" innovation in both sectors. Likewise, difficulties in forecasting the technological developments of the other side may lower the rate of technical advance of all sectors. Lastly, we show that the analysis of GPT's has testable implications in the context of R&D and productivity equations, that can in principle be estimated.

download in pdf format
   (325 K)

email paper

This paper is available as PDF (325 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w4148

Published: Journal of Econometrics, Annals of Econometrics, vol. 65, no. 1, pp. 83-108 1995 citation courtesy of

Users who downloaded this paper also downloaded these:
Helpman and Trajtenberg w4854 A Time to Sow and a Time to Reap: Growth Based on General Purpose Technologies
Helpman and Trajtenberg w5773 Diffusion of General Purpose Technologies
Jovanovic and Rousseau w11093 General Purpose Technologies
Cecchetti w14134 Crisis and Responses: the Federal Reserve and the Financial Crisis of 2007-2008
Bresnahan, Brynjolfsson, and Hitt w7136 Information Technology, Workplace Organization and the Demand for Skilled Labor: Firm-Level Evidence
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us