What is a General Purpose Technology a GPT

What is a General Purpose Technology (a GPT)? • • • Wide Scope for Improvement • • Cost reductions Quality improvements Wide Variety of Uses • • Multiple industry applications Many follow on inventions Strong Complementarities, both technological and economic.

Fundamental Source of Internet Improvements: Three General Purpose Technologies (Two familiar and established, one emerging. ) • Digital GPT: Rapidly declining costs and the convergence of core components to a shared digital platform. • Networking GPT: Physical and social networking that leads to rapid sharing, specialization, and augmentation of digital and non-digital assets. • Individualization GPT: Assignment of identity and meaning to people, things, and information.

The Digital GPT: Cost reductions • From 1945 to 2001 an increase in computer speed of 180 billion times. • A decrease in cost per computation of 1. 3 trillion times.

Application: Digital Banking Easy labor substitution. Paper substitution. Sophisticated labor substitution.

Technological Complementarity • Other Capital Goods & Production Processes Must be Redesigned to Take Full Advantage of GPT Capabilities. Changes in: * Architecture, * Accounting * Book publishing, *…

Networking GPT: Cost Reductions • • Recall the cost reductions of telecom. Also steep reductions in price of routers, servers, and modems. AOL: Originally cost $2. 95 per hour for connections at 14. 4 K.

Networking GPT: Quality Improvement • Standard Consumer Modem Speeds. Analog Modem speeds: 56 K 28. 8 K 14. 4 K 2400 baud 1200 baud • 300 baud WWW: Huge improvements in content. 150 x increase