General Purpose Technology

General purpose technologies (GPT) are characterized by pervasiveness, innovation spawning, and scope for improvement. They play the role of enabling technologies, thereby opening up new opportunities rather than offering complete, final solutions. Their emergence affects firms' productivity, household production, consumption patterns, and socioeconomic relationships. GPT have an impact on an individual and on an aggregate level.

Scholars have debated whether nanotechnology currently qualifies, or is likely to qualify in the future, as a GPT. Some claim that nanotechnology has already achieved this status, while others criticize the overly broad description of GPT. Jan Youtie and colleagues considered this question in 2008, beginning with the definition that to qualify as a GPT, nanontechnology must meet at least three criteria: pervasiveness, an innovation spawning effect, and scope for improvement. A growing body of literature claimed or assumed that nanotechnology is a GPT, but sufficient methodology has not been developed to determine if this is the case. Youtie and colleagues analyzed patent and patent citation databases, an approach also used by earlier authors, but also criticized this approach as incomplete, and concluded that currently there is no acceptable way to answer the question of whether nanotechnology qualifies as GPT.

In contrast to incremental innovations that mostly improve the efficiency of resource deployment are so called drastic or major inventions. These latter qualify as GPT if they have far-reaching and prolonged implications in the sense of potentially pervasive use in a wide range of sectors in ways that drastically change their modes of operation. Both types of innovations are strongly related: drastic innovations induce series of incremental and often complementary innovations. These complementarities magnify the effects of innovation in the GPT and help propagate them throughout the economy. In any case, a drastic innovation introduces a discontinuity in the organization of the economy, in the sense that the innovation replaces an old technology that played a significant role in an industry with new methods of production. Or it replaces an old material that performed certain functions with a new one.

Examples for an exchange of technology could be the replacement of horse power by electricity, or in the case of products, the replacement of rubber or steel by plastics. The invention of electricity is widely accepted [Page 274]to reflect a GPT. The productivity gains associated with the introduction of electric motors in manufacturing significantly reduced energy costs. Aside from this, the invention of electricity made people independent from daylight hours, fostered the more efficient design of factories, and thereby taking advantage of the newfound flexibility of electric power. Finally this had far reaching consequences for daily routines, not only in the production processes of firms, but also the private context of families.