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Technology Regimes and Productivity Growth in Europe and the United States: A Comparative and Historical Perspective

  • van Ark, Bart
  • Smits, Jan Pieter
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    Over the past decade much has been published on the contribution of information and communication technology (ICT) to economic growth. In an attempt to find parallel historical evidence, several scholars have attempted to review the contribution of other general purpose technologies (notably steam and electricity) to output and productivity growth. Most of these contributions have had a national focus on the United States and for a limited number of European countries (for example, Finland, Sweden, The Netherlands and the United Kingdom). In this paper we review the evidence from these individual studies from an international comparative perspective. This should help us to better understand how general purpose technologies (steam, electricity and ICT) have contributed to differentials in productivity growth between European countries and the United States. In addition to the evidence from the macroeconomic perspective we also focus on the diffusion of technologies by industry, for which we exploit information on technology adoption and productivity growth by industry and their contributions to the aggregate. We conclude that in terms of the speed of diffusion, the ICT era is comparable to the electricity age, i.e., a relatively rapid diffusion across the economy. But the impact of ICT on productivity growth is, at least for the time being, less pervasive than for electricity. The diffusion is strongest in market services, but European countries generally seem to have fallen behind the U.S.. The paper speculates that non-technological factors may have interacted more intensively with technology use during the ICT era than during the electricity and steam ages.

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    Paper provided by Institute of European Studies, UC Berkeley in its series Institute of European Studies, Working Paper Series with number qt1td1h23k.

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    Date of creation: 01 Oct 2005
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    Handle: RePEc:cdl:bineur:qt1td1h23k
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    1. Paul A. David & Gavin Wright, 2005. "Early Twentieth Century Productivity Growth Dynamics: An Inquiry into the Economic History of “Our Ignorance”," Macroeconomics 0502023, EconWPA.
    2. Nicholas Crafts, 2002. "Productivity growth in the Industrial Revolution: a new growth accounting perspective," Proceedings, Federal Reserve Bank of San Francisco, issue Nov.
    3. Jalava, Jukka, 2003. "Electrifying and Digitalizing the Finnish Manufacturing Industry: Historical Notes of Diffusion and Productivity," Discussion Papers 870, The Research Institute of the Finnish Economy.
    4. Henrekson, Magnus & Edquist, Harald, 2006. "Technological Breakthroughs and Productivity Growth," Working Paper Series 665, Research Institute of Industrial Economics.
    5. Stephen D. Oliner & Daniel E. Sichel, 2002. "Information technology and productivity: where are we now and where are we going?," Economic Review, Federal Reserve Bank of Atlanta, issue Q3, pages 15-44.
    6. Nicholas Crafts, 2004. "Steam as a general purpose technology: A growth accounting perspective," Economic Journal, Royal Economic Society, vol. 114(495), pages 338-351, 04.
    7. Gordon, Robert J, 2004. "Why Was Europe Left at the Station when America's Productivity Locomotive Departed?," CEPR Discussion Papers 4416, C.E.P.R. Discussion Papers.
    8. Devine, Warren D., 1983. "From Shafts to Wires: Historical Perspective on Electrification," The Journal of Economic History, Cambridge University Press, vol. 43(02), pages 347-372, June.
    9. Robert J. Gordon, 2003. "Exploding Productivity Growth: Context, Causes, and Implications," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 34(2), pages 207-298.
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