Was Electricity a General Purpose Technology?

16 Pages Posted: 18 Sep 2006  

Petra Moser

Leonard N. Stern School of Business - Department of Economics; National Bureau of Economic Research (NBER)

Tom Nicholas

Harvard University - Entrepreneurial Management Unit

Abstract

This paper uses historical patent citation data to test whether electricity, as the canonical example of a General Purpose Technology (GPT), matches the current citations-based criteria of GPTs. We use a sample of 1,867 American patents assigned to publicly traded companies in the 1920s and 3,400 forward citations to these patents to check which of four industry categories - electricity, chemicals, mechanical and other - most closely matches the key elements of GPTs. Our results suggest that electricity patents were broader in scope than other categories of patents at their grant date, and that they were more "original" than their counterparts. However, we also show that electricity patents had lower generality scores, fewer citations per patent (a measure of technological importance), and shorter citation lags (i.e., faster rates of knowledge depreciation). We argue that technological change, even in the 1920's, was much broader than has previously been considered.

Keywords: Innovation, Patents, General Purpose Technology, U.S. Economic History

JEL Classification: N00, O30, O31, O34

Suggested Citation

Moser, Petra and Nicholas, Tom, Was Electricity a General Purpose Technology?. The American Economic Review, Papers and Proceedings, Vol.94, No. 2, pp. 388-394. May 2004. Available at SSRN: https://ssrn.com/abstract=930649

Petra Moser (Contact Author)

Leonard N. Stern School of Business - Department of Economics ( email )

269 Mercer Street
New York, NY 10003
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Tom Nicholas

Harvard University - Entrepreneurial Management Unit ( email )

Cambridge, MA 02163
United States

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