BPEA | 1996: Microeconomics

Technical Progress and Co-invention in Computing and in the Uses of Computers

Microeconomics 1996

WHY DO SOME technologies offer opportunities for widespread economic
change? Purely technical progress is rarely sufficient to make an
invention economically important. Users, through their own experimentation
and discovery, make technology more valuable. We call this
activity co-invention to distinguish it from original invention. Coinvention
is potentially complex and uncertain, and it can be a bottleneck
in technical progress. Yet the complementarity between inventions
by users and by technologists can benefit a wide range of economic
activities. Understanding co-invention is a key to understanding the
economic payoff to invention in new information technologies today.