Abstract
Studies of economic growth often refer to “general purpose technology” (GPT), “infrastructure,” and “openness” as keys to improving productivity. Some GPTs, like railroads and the Internet, fit common notions of infrastructure and spawn debates about openness, such as network neutrality. Other GPTs, like the steam engine and the computer, seem to be in a different group that is more modular and open by nature. Big data, artificial intelligence, and various emerging smart technological assemblages have been described both as GPTs and infrastructure. We present a technology flow framework that clarifies when a GPT is implemented through infrastructure, provides a basis for policy analysis, and defines empirical research questions. On the demand side, all GPTs—whether implemented through infrastructure or not—enable a wide variety of productive uses and generate substantial spillovers to the rest of the economy. On the supply side, infrastructure is different from many other implementations of GPTs; infrastructure is partially nonrival, which may complicate appropriation problems and raise congestion issues. It also exhibits tethering, meaning that different users must be physically or virtually connected for the infrastructure to function, and this makes control of its uses more feasible and more salient to policy.
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Notes
While we are primarily focused on positive third-party effects, we note that negative effects are also possible, for example when transportation infrastructure facilitates illegal movements of goods or when Internet infrastructure facilitates divisive or mental-health-impairing forms of social media. Where such effects exist, they further heighten the pressure for some form of overarching commons management of the infrastructure.
With respect to national and regional economic growth, Gramlich (1994, p. 1177) defines infrastructure as “large capital-intensive natural monopolies such as highways, other transportation facilities, water and sewer lines, and communication systems,” and Grimes (2014, p. 333) expands it to “capital-intensive investments that service multiple users.” Frischmann (2012) develops the idea of infrastructural resources that are a special type of public good that has three characteristics.
The facility is a specific part or group of parts of what Lipsey et al. (2005) call the facilitating structure of technology.
Frischmann also discusses purely nonrival “intellectual infrastructure,” but our model in this paper does not aim to incorporate those examples.
As always, one can further subdivide, and say that computers are built on microprocessors, storage devices, and so forth. Older GPTs like electricity and even the wheel (on the mouse or disk drive) play a role in computers.
An even more pure example of rival production would be Adam Smith’s pin factory, where the user of a pin would not need any design or support services at all.
Apparently the first reference to this term is Ramsdell (1980) regarding the VisiCalc spreadsheet.
The adjective working is important here. One could have a non-working copy of Excel even without a computer, just as one could have a non-working car without an internal combustion engine.
In most cases that we are aware of, the owners of a facility seem to perceive benefits from being labeled infrastructure, since this implies that the facility is more worthy of attention and perhaps favorable policy treatment through regulation or even subsidies. However, if the label “infrastructure” is seen as implying social or regulatory obligations (more like “public utility”), facility owners might resist it.
There is a downside to this openness, since it enables uses that may produce negative third-party effects that are both legal (transportation of cigarettes or transmission of pornography) or illegal (transportation of illegal weapons or hacking of personal information). These negative third-party effects can lead both to call for policing while keeping the system open (the usual response with roads) or to calls for the system to be made less open (e.g. requiring Facebook to detect factually incorrect information).
This term seems to have been first used by Vint Cerf, David Reed, Stephen Crocker, Lauren Weinstein and Daniel Lynch in an Oct. 2009 letter to then FCC Chairman Julius Genochowski supporting network neutrality: http://voices.washingtonpost.com/posttech/NetPioneersLettertoChairmanGenachowskiOct09.pdf.
Increasingly there are field-of-use restrictions in licensing agreements that legally “tether” the technology to certain uses (Schuett 2012).
Carlaw et al. (2008) present a different view that there is one overall GPT called “programmable computing networks” of which computers and the Internet are just separate implementations. They also argue that the term ICT should properly be even broader, encompassing writing systems, printing, and so forth since these also facilitate communication of information.
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Hogendorn, C., Frischmann, B. Infrastructure and general purpose technologies: a technology flow framework. Eur J Law Econ 50, 469–488 (2020). https://doi.org/10.1007/s10657-020-09642-w
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DOI: https://doi.org/10.1007/s10657-020-09642-w