Digitization and the Internet: Catalysts of Modern Economic Transformation and General-Purpose Technologie

Abstract

This paper examines the transformative impact of digitization and the Internet, positing these developments as modern general-purpose technologies (GPTs) akin to those of the past, such as the Corliss steam engine and electrification. The transition from physical to digital information handling has revolutionized communication, enhancing the efficiency and speed of information collection, packaging, and distribution. Historical GPTs like the automobile, commercial aviation, and television catalyzed significant changes in economic activities and daily life. Similarly, digitization and the Internet are reshaping service industries—healthcare, government, and financial services—which now constitute over 75% of GDP. This paper explores the broader economic impacts of these technological advancements, emphasizing their role in fostering new combinations of ideas and actors and generating new economic activities. Despite measurable improvements in productivity and efficiency, the most profound long-term effects of these technologies remain beyond quantification..