general-purpose technology
In plain wordsA technology, like electricity or the computer, that spreads through the whole economy, keeps improving and sparks many other inventions. Many economists think AI is one.
In economics, a technology whose effects spread economy-wide because of three traits, as Timothy Bresnahan and Manuel Trajtenberg characterized them: many sectors use it as an input, it keeps improving, and it spawns complementary innovations among its adopters. Steam power, the electric dynamo, the internal combustion engine and the computer are the usual historical cases. Because adopters must reorganize processes, retrain workers and invent complementary products before gains arrive, general-purpose technologies typically raise measured productivity only after long lags, which can produce a productivity paradoxproductivity paradox, n.: The puzzle that a powerful new technology, like computers in the 1980s or AI today, can be everywhere without showing up as faster growth in how much workers produce.. Many economists classify AI, and large language modelslarge language model, n.: A computer program trained on enormous amounts of text to predict the words that come next. At vast scale, that simple skill lets it chat, answer questions, translate, summarize and write code. in particular, as a general-purpose technology, implying broad but slow-arriving effects on growth, work and the distribution of income.
If AI is a general-purpose technology, the big productivity gains will come only after firms redesign their workflows around it.
Origin
Formalized by Timothy Bresnahan and Manuel Trajtenberg in 'General Purpose Technologies: Engines of Growth?' (NBER working paper 1992; Journal of Econometrics, 1995), drawing on Paul David's study of the slow productivity payoff of electrification (1990). Tyna Eloundou and colleagues' 'GPTs are GPTs' (2023) applied the idea to language models.
Usage note
Not to be confused with GPT, the Generative Pre-trained Transformer family of language models, or with a general-purpose AI modelgeneral-purpose AI model, n.: The EU's legal name for the large, adaptable AI models behind chatbots and similar tools: models that can turn their hand to many different jobs and be built into many other products., a regulatory category in the EU AI Act.
Related
- productivity paradoxproductivity paradox, n.: The puzzle that a powerful new technology, like computers in the 1980s or AI today, can be everywhere without showing up as faster growth in how much workers produce.
- task exposuretask exposure, n.: A measure of how much of a job's work AI could, in principle, do or speed up. High exposure means many of the job's tasks are within AI's reach, not that the job will vanish.
- technological unemploymenttechnological unemployment, n.: Joblessness caused by machines or software taking over work that people used to be paid for, faster than new kinds of work appear for them.
- AI as normal technologyAI as normal technology, phr.: The view that AI, however important, will change society gradually, like electricity or the internet, through slow adoption by people and institutions, rather than as a sudden, uncontrollable superintelligence.
- explosive growthexplosive growth, n.: A hypothetical jump in the world economy's growth rate to 30% a year or more, about ten times today's pace, which some economists think AI that replaces human workers could cause.
- Jevons paradoxJevons paradox, n.: The observation that making something more efficient can make people use more of it overall because it gets cheaper — as with coal in the 1800s, and with AI computing today.
- general-purpose AI modelgeneral-purpose AI model, n.: The EU's legal name for the large, adaptable AI models behind chatbots and similar tools: models that can turn their hand to many different jobs and be built into many other products.
Sources
- Bresnahan, T. F. & Trajtenberg, M. (1995). General purpose technologies: Engines of growth? Journal of Econometrics 65(1), 83–108.
- David, P. A. (1990). The Dynamo and the Computer: An Historical Perspective on the Modern Productivity Paradox. American Economic Review 80(2), 355–361.
Mentioned in
AI as normal technologyAI as normal technology, phr.: The view that AI, however important, will change society gradually, like electricity or the internet, through slow adoption by people and institutions, rather than as a sudden, uncontrollable superintelligence., productivity paradoxproductivity paradox, n.: The puzzle that a powerful new technology, like computers in the 1980s or AI today, can be everywhere without showing up as faster growth in how much workers produce., task exposuretask exposure, n.: A measure of how much of a job's work AI could, in principle, do or speed up. High exposure means many of the job's tasks are within AI's reach, not that the job will vanish., technological unemploymenttechnological unemployment, n.: Joblessness caused by machines or software taking over work that people used to be paid for, faster than new kinds of work appear for them.