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Revolutionary blocks of technologies

What happened?

Over the years, we have taken great interest in ideas about technological revolutions, long waves of economic growth and resulting changes in the everyday life of consumers. Both in the academic literature and in popular accounts, much emphasis has been placed on single breakthrough technologies (e.g. the steam engine, electricity, IT) as the drivers of these revolutions. A recent paper by Italian scholar Alessandro Nuvolari argues that such a focus on so-called general purpose technologies makes little sense as these are difficult to define (technologies evolve continuously), the timing of the “usual suspects” does not match economic waves and, above all, each of these technologies was only able to emerge as the result of multiple developments (e.g. machine tools, metallurgy, thermodynamics, coal mining for the steam engine). Because of the latter, Nuvolari argues that we should re-embrace the 1950s notion of development blocks of enabling technologies that reinforce each other.

What does this mean?

The notion of general purpose technologies offers a simplistic, and hence, attractive model, but, reality is more complex and we should try to understand how multiple technologies (and entrepreneurial activities) are interrelated and mutually reinforce each other in an “autocatalytic” process. Similar to the steam age, the IT age was only possible due to simultaneous developments in adjacent fields (i.e. semiconductors, computers, software and network technology). Also, on a somewhat lower level, the smartphone revolution was the result of ongoing miniaturization in semiconductors, the development of touchscreens and mobile network technology. The value of these developments combined is far greater than the sum of the individual components.

What’s next?

As we noted last week, digital technology continues to evolve and the changes in any layer of the technology stack stimulate change in other layers in an autocatalytic fashion. We have also argued before that a host of new technologies are bound to herald a new revolution; A.I., quantum computing, 5G networks. Indeed, the development block approach allows for such a collection of (interrelated) technologies, instead of frantically looking for the next single general purpose technology. And, even more so, it also allows us to study the linkages between this (core) block of technologies and other potentially revolutionary (blocks of) technologies such as nano- and biotechnology that are partly based on the same enabling technology. Finally, as Nuvolari points out, this new block of technologies does not imply that older technologies (and businesses) will be blown away in a process of creative destruction. Instead, successive development blocks show dynamics of creative accumulation in terms of knowledge and supportive infrastructures.