Technological change in ICT in light of ideas first learned about the machine tool industry

Abstract

Rosenberg (1963, J. Econ. Hist., 23(4), 414-443) analyzed innovation in the 19th and early 20th century machine tool (MT) industry and its industrializing customers. This paper re-applies his analysis to the invention and application of information and communications technologies (ICTs) in the 20th and 21st centuries. Rosenberg's ideas of technological convergence and of collective learning that leads to a pool of knowledge in a competitive upstream industry are emphasized. In some ICT market segments, the primary customer is a technologist; for these segments, Rosenberg's analysis works quite well. The core reason appears to be that there, as Rosenberg said of MTs, the analysis can go forward on a "purely technological level." In the commercially oriented ICT market segments where most value has been created, this assumption fails. Difficulties at the boundary between purely technological innovation and commercial innovations change the analysis considerably. The locus of accumulating knowledge, the path of technological change through the economy, the structure of the industry supplying the general components and the degree of sharing of technical advances across firms and industries, all change in an easily explained way. The idea of the boundary between two complementary bodies of knowledge may be important. The idea that commercial innovation can be unlike technical invention may be important.