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Technological Breakthroughs and Productivity Growth

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Author Info
Henrekson, Magnus () (Research Institute of Industrial Economics)
Edquist, Harald () (SNS)

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Abstract

This study consists of an examination of productivity growth following three major technological breakthroughs: the steam power revolution, electrification and the ICT revolution. The distinction between sectors producing and sectors using the new technology is emphasized. A major finding for all breakthroughs is that there is a long lag from the time of the original invention until a substantial increase in the rate of productivity growth can be observed. There is also strong evidence of rapid price decreases for steam engines, electricity, electric motors and ICT products. However, there is no 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.

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Paper provided by Research Institute of Industrial Economics in its series Working Paper Series with number 665.

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Length: 55 pages
Date of creation: 03 May 2006
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Publication status: Published in Research in Economic History, 2006, pages 1-53.
Handle: RePEc:hhs:iuiwop:0665

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Related research
Keywords: Electrification; General purpose technologies; ICT revolution; Productivity growth; Steam power;

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Find related papers by JEL classification:
N10 - Economic History - - Macroeconomics and Monetary Economics; Growth and Fluctuations - - - General, International, or Comparative
O10 - Economic Development, Technological Change, and Growth - - Economic Development - - - General
O14 - Economic Development, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Edquist, Harald, 2005. "Do hedonic price indexes change history? The case of electrification," Working Paper Series in Economics and Finance 586, Stockholm School of Economics, revised 28 Feb 2005. [Downloadable!]
  2. Lee, Minkyu & Heshmati, Almas, 2006. "A Dynamic Flexible Partial-Adjustment Model of International Diffusion of the Internet," Ratio Working Papers 99, The Ratio Institute. [Downloadable!]
  3. Edquist, Harald, 2008. "Does Hedonic Price Indexing Change Our Interpretation of Economic History? Evidence from Swedish Electrification," Working Paper Series 742, Research Institute of Industrial Economics, revised 03 Sep 2009. [Downloadable!]
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