Lipsey's Quest for the Micro-Foundations of General Purpose Technologies : The General Purpose Engine

The powerful General Purpose Technology (GPT)-concept of the late 1990s is a culmination of evolutionary views in innovation-thinking. The scholarly contributions focusing on the (macro)-economical aspects being numerous, the technological aspects of the GPT-concept seem underdeveloped. Richard Lipsey observed that, although the effects of GPTs were investigated extensively, they missed contributions to the GPT’s micro-foundations. This paper uses the Schumpeterian concept of 'swarms of innovations' and the concept of basic innovation, to create insight in the technological micro-foundation of a GPT. Three case studies are presented: 'The invention of the Steam Engine,' 'The invention of the Electromotive Engine' and 'The invention of Electric Light.' For the GPT-Steam and the GPT-Electricity we found that it is the 'General Purpose Engine' that makes the GPT showings its characteristics of persaviness, improvement and spawning. These general purpose engines create the micro-foundations of the GPT-concept that Richard Lipsey was looking for