AI, Blockchain, AR/VR, Which One Is A General Purpose Technology?

The noise about disruptive tech is deafening; Initial Coin Offerings (ICOs) creating crypto-millionaires at a pace causing even governments to worry, brain + machine interfaces and your face replacing your fingerprints/passwords. These, and other propositions that truly make it seem like we live in a world that is moving faster than most of us can adapt to. But which of these technologies will go beyond the hype and truly change our lives at scale? Which of these will be a General Purpose Technology (GPT).

What is a General Purpose Technology (GPT)?

To assess the question above, I decided to look at these technologies through the lenses of General Purpose Technologies (GPT). GPTs are those technologies that impact economic growth, and transform both household life and the ways in which firms conduct business. The examples that quickly come to mind are steam, electricity (#1 in my opinion), internal combustion, computers and the internet. I’ll also throw in telephony. These technologies fundamentally impacted how we live, expanded our lives (physically and emotionally), built our cities and changed how we interact with the world around us. According to Bresnahan and Trajtenberg, GPTs also have 3 fundamental features or characteristics

1. GPTs are pervasive and spread to most sectors
2. GPTs improve over time and should keep lowering the costs of its user
3. GPTs spawn innovation making it easier to invent and produce new products or processes.

There is a discussion about productivity gains as a characteristic of GPTs. This is a divisive topic as, depending on inputs into the measures of productivity (is it a product GPT or a process GPT?), school of economics you subscribe to, and time frames considered, not all GPTs provide productivity gains. But they are still considered GPTs. There is also the recognition that some GPTs increase the productivity gains from the GPTs before them. For example, vehicular transportation, a GPT, was improved by electrification.

For our own purposes, while the 3 broad features or characteristics can be applied to any GPT, we’ll filter further by adding a 4th (and I’ll suggest important filter) feature

4. Is the GPT fundamentally disruptive and foundational? Electricity displaced the technologies of lighting, mechanization, and processing that came before it. It is also foundational to many of the GPTs we consider absolutely necessary nowadays (telephony and the Internet are two GPTs that wouldn’t exist without electrification). Are any of the new technologies this foundational? Especially within the next 2–5 years.

AI as GPT

The most likely GPT, from the analysis above, is Artificial Intelligence. It is already being applied in our shopping recommendations and companies are already using intelligent agents to detect malware, to prevent money laundering and automate claims process at an insurance company in Singapore. Like, electricity, all the other technologies being hyped right now can only truly achieve their potential with the aid of AI. This is why most of the folks who understand what’s going on (and, honestly, some who do not) are focused on this particular technology. 

And it makes sense that AI might be the option; we need more energy efficiency than renewables, AR and VR will impact us less than the transition from radio to TV, connected devices are still (basically) devices and the trustless promise of blockchain/cryptocurrencies require us to first trust the underlying system.

While the AI hype far surpasses the true capabilities at this point, as Kevin Kelly rightly points out in this fantastic article, AI will change business as we know it. Because, if it achieves its potential as a GPT, and as the researchers in the quote below suggest, it’s about to be a bumpy ride…

“overall the evidence clearly supports the view that technological progress is uneven, that it does entail the episodic arrival of GPTs, and that these GPTs bring on turbulence and lower growth early on and higher growth and prosperity later .”

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