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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.

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What is a General Purpose Technology (a GPT)?

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  1. 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.

  2. 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.

  3. 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.

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

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

  6. 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 14.4K.

  7. Networking GPT: Quality Improvement • Standard Consumer Modem Speeds. • WWW: Huge improvements in content. Analog Modem speeds: 56K 28.8K 14.4K 2400 baud 1200 baud 300 baud 150x increase

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