Title: Five Facts You Need to Know about Technology Diffusion
Author: Comin, Hobijn & Rovito
Scope: 4 stars
Readability: 2 stars
My personal rating: 4 stars
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Topic of Book

The article overviews five key facts that are important to know about the diffusion of technology through society.

Key Take-aways

• Technologies diffuse within countries much faster than between countries.
• Some countries are far more likely to adopt foreign technologies than others.
• Cross-national diffusion of technology is increasing in speed. The biggest jump appears to have happened in the period 1925-1950.

Important Quotes from Book

This paper presents a new data set on the diffusion of about 115 technologies in over 150 countries over the last 200 years. Our main 5 findings are as follows:

(i) Once the intensive margin is measured, technologies do not diffuse in a logistic way (i.e. do not follow an S-curve as predicted by much of the literature).

ii) Within a typical technology, the dispersion in the adoption levels across countries is about 5 times larger than the cross-country dispersion in income per capita.

(iii) The rankings of countries by level of technology adoption are very highly correlated across technologies. There are universal leaders and universal followers in technology among the countries in the world. That is, the rankings of countries according to the technology adoption level in a given year are highly correlated across technologies. The median correlation is 0.78 capita. The cross-country dispersion in technology adoption for individual technologies is 3 to 5 times larger than cross-country dispersion in income per capita. The relative position of countries according to the degree of technology adoption is very highly correlated across technologies. This correlation declines significantly within the OECD.

(iv) There is absolute convergence of adoption in 91 percent of the technologies of our CHAT data set. The average speed of convergence is 3.7 percent per year. Thus, half of the distance to the steady state is covered in 19 years.

(v), The speed of convergence of technology across countries has accelerated over time. The median speed of convergence for technologies invented before 1925 has been about 2 percent per year. The median speed of convergence for technologies invented between 1925 and 1950 has been 5.5 percent per year, and, for the technologies invented since 1950, the median speed of convergence has been about 6 percent per year.

The increase in the speed of convergence of post-1925 technologies resembles more a structural break than a smooth transition. The average speed of convergence of technologies developed in the period 1900-1925 is approximately 1.5 percent per year, while the average speeds of convergence for technologies developed in the periods 1925-1950 and 1950-1975 are 5.8 and 7.8 percent per year, respectively.