An Exploration of Technology Diffusion

TLDR

The study develops a model linking aggregate growth dynamics to observable technology adoption patterns. The model is estimated with diffusion data for 15 technologies across 166 countries spanning two centuries. Results show an average 45‑year lag between invention and adoption, with newer technologies adopted faster, substantial cross‑country variation, and this variation explaining at least 25 % of per capita income differences. JEL codes: O33, O41, O47.

Abstract

We develop a model that, at the aggregate level, is similar to the one-sector neoclassical growth model; at the disaggregate level, it has implications for the path of observable measures of technology adoption. We estimate it using data on the diffusion of 15 technologies in 166 countries over the last two centuries. Our results reveal that, on average, countries have adopted technologies 45 years after their invention. There is substantial variation across technologies and countries. Newer technologies have been adopted faster than old ones. The cross-country variation in the adoption of technologies accounts for at least 25 percent of per capita income differences. (JEL O33, O41, O47)