The Rise and Fall of Great Technologies and Powers

• In Event: Factors and Causes Shaping Great Powers

Abstract

How and when do technological changes affect the rise and fall of great powers? Specifically, how do significant technological breakthroughs result in differential rates of economic growth among great powers? International relations scholars have long observed that technological revolutions often lead to upheaval in global economic leadership, bringing about a power transition in the international system. However, there has been surprisingly limited investigation of how this process occurs. The standard explanation emphasizes a country’s ability to monopolize technological innovations in leading sectors (LS) — new, fast-growing industries whose growth outpaces the rest of the economy. I outline an alternative mechanism based on the diffusion of general-purpose technologies (GPTs), which presents a different trajectory for countries to leapfrog the industrial leader. Characterized by their potential for continuous improvement, pervasiveness, and synergies with complementary innovations, GPTs only make an economy-wide impact after a drawn-out process of diffusion across many sectors. The GPT trajectory shapes which institutions matter. Specifically, variation in institutional adaptations that widen the human capital base to enable the spread of GPTs explain why some industrial leaders separate themselves from the pack.

To test the LS and GPT mechanisms, I conduct process-tracing analysis on three historical case studies: 1) Britain’s rise to preeminence in the Industrial Revolution, 2) America and Germany’s overtaking of British industrial leadership in the Second Industrial Revolution, and 3) Japan’s challenge to America’s technological dominance amidst the information technology revolution. Evidence from these case studies supports the relative explanatory power of the GPT mechanism over the LS mechanism. According to many scholars, these three cases correspond to history’s three industrial revolutions. If those who claim we are in the midst of a fourth industrial revolution today are to be taken seriously, then the findings should be particularly relevant for the prospects of a U.S.-China power transition.

Author

• Jeffrey Ding, Stanford University