Following the Trail of a General Purpose Technology:Electrical & Electronic Technological Adoption in the1920s

Abstract

It has been argued that “General Purpose Technologies” (GPTs) have the power to change the pace and direction of economic progress. Although there is empirical evidence on the virtuous effect of the diffusion of these technologies, this evidence is mostly based, if not exclusively, on measures of their usage. This article studies the economic consequences of the technological adoption of a GPT, i.e. on those who are able to produce, transform or complement with it. It focuses on the case of Electrical & Electronic (E&E) technologies at the beginning of the twentieth century and shows how places that produced E&E technologies using an extensive measure of adoption grew faster and paid higher wages than others between 1920 and 1930. To do so it relies on a novel database containing patenting activity at the county level that dates back to 1836, text mining techniques to identify E&E patents, and demographic and economic data from the US Census Bureau.