1. Technology and the rise and fall of Nations Y376 International Political Economy April 4, 2012 Michael Lee

2. Summary  Why do economies grow (or fail to grow)?  Historical patterns  Why do some countries innovate while others do not?  Why did America lead the Fordist revolution  Why did America lead the ICT revolution?  What is the next big thing?

3. Discuss  “Computer chips, potato chips. What does it matter? They’re all chips!”  Does it matter which industries the US is successful in?

4. Types of economic growth  Smithian  Division of labor  Solovian  Diminishing returns to capital  convergence  Schumpeterian  Endogenous growth theory  Process vs. product  Geopolitical implications

5. Discussion  Why did Britain decline in the 20 th century? Why did the Soviet Union fail to catch the US? Japan? Do the same forces threaten American leadership?

6. Soviet and US GDP per capita, 1946- 2006

7. Relative production of high-tech goods, 1830-2007

8. Relative ownership of global foreign investment assets, 1829-2007

9. Sussex school  http://www.youtube.com/watch?v=- AAyUN7wj9I http://www.youtube.com/watch?v=- AAyUN7wj9I  Irruption  frenzy  crisis  http://www.youtube.com/watch?v=5L0IvI00AY4& feature=related http://www.youtube.com/watch?v=5L0IvI00AY4& feature=related  (21:00)  Crisis  Synergy  maturity  http://www.youtube.com/watch?v=sICSyC9u5iI http://www.youtube.com/watch?v=sICSyC9u5iI  http://www.youtube.com/watch?v=ONZFkqzuMjI http://www.youtube.com/watch?v=ONZFkqzuMjI

10. Past technological revolutions TechnologyPeriodLeading countryCrisis Textiles, pig iron1771BritainCanal mania Steam and Railroads 1829 Britain  USA Railway mania Steel, electricity and heavy engineering 1875 Britain  USA/Germany Baring crisis of 1890 Oil and mass production 1908USAGreat Depression Information and telecommunicati ons 1971USADot com bust and crisis of 2008

11. What kinds of things facilitate high tech growth?  Property rights  Access to capital  Education (elite vs. median)  Tax/subsidy policy  Leading cities  Catch-up vs. leadership  Political cohesion

12. Some plausible drivers of growth don’t hold up (researchers/1000 people, OECD countries)

13. Competitiveness in Important industries historically  Synthetic dye  Aniline red  Copyright rules  Automobiles  Mass production  Engineering vs. pure research  ICT  Venture capitalism  Hardware vs. software

14. Global synthetic dye population, 1857-1914

15. Motor vehicle production, 1930-1990

16. ICT value-added, 1985-2007

17. Question  What is the next “big thing”?  Who will get there first?