"The first printing press was established around 1450 in Mainz, Germany (see chart above on left). Contemporaries saw the technology ushering in dramatic changes in the way knowledge was stored and exchanged. Printing was from the outset a for-profit enterprise. But what was the economic impact of this revolution in information technology? By lowering the cost of disseminating ideas, did the explosion of print media erode the importance of location?
I find that cities in which printing presses were established 1450-1500 had no prior growth advantage, but subsequently grew far faster than similar cities without printing presses. My work uses a difference-in-differences estimation strategy to document the association between printing and city growth. The estimates suggest early adoption of the printing press was associated with a population growth advantage of 21 percentage points 1500-1600, when mean city growth was 30 percentage points. The difference-in-differences model shows that cities that adopted the printing press in the late 1400s had no prior growth advantage, but grew at least 35 percentage points more than similar non-adopting cities from 1500 to 1600.
Cities that adopted print media benefitted from positive spillovers in human capital accumulation and technological change broadly defined. These spillovers exerted an upward pressure on the returns to labour, made cities culturally dynamic, and attracted migrants.
The printing press was one of the greatest revolutions in information technology. The impact of the printing press is hard to identify in aggregate data. However, the diffusion of the technology was associated with extraordinary subsequent economic dynamism at the city level. European cities were seedbeds of ideas and business practices that drove the transition to modern growth. These facts suggest that the printing press had very far-reaching consequences through its impact on the development of cities."
MP: It's estimated that the invention of the printing press started Information Age 1.0 by lowering the cost of processing, copying and disseminating information by about 1,000 times. The commercial introduction of the microchip in 1971 was the invention that launched Information Age 2.0, and it's estimated that the microchip lowered the cost of information by about 10 million times. And today's microchips are about 30,000 times faster than the 1971 version.
HT: Paul Kedrosky