Saturday, February 12, 2011

Economic Impact of the Printing Press: Info Age 1.0


Some key paragraphs from the paper "Information Technology and Economic Change: The Impact of the Printing Press" by American University professor Jeremiah Dittmar:

"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

9 Comments:

At 2/12/2011 11:26 PM, OpenID Sprewell said...

Ironically, the trend is in the opposite direction this time, with the internet devaluing the role of cities. Just as the advanced roads and highways of the 20th century allowed people to live in suburbs or commute from smaller towns, the internet is about to take that decentralization to a whole nother level. You're already seeing this with print media, where all the print publications based out of New York are being put out of business by blogs that are spread out all over the country, even this one from Flint. :) That's only the beginning, which is why metropolitan real estate markets like NY or SF or LA are in for decades of decline as these internet businesses and telecommuting take off.

 
At 2/12/2011 11:46 PM, Blogger Buddy R Pacifico said...

Sprewell, print publications vs. media is not a big city devolver. In fact, all over the world, metrpolitan areas are having huge growth. It is a cultural thing with young people to have a life with a wide selection of entertainment, food, educational venues and transportation options.

 
At 2/13/2011 12:01 AM, OpenID Sprewell said...

Buddy, I agree that print media is not a huge business, but that's only one example that has already seen great change. For example, most software programming can be done from anywhere. Online learning will destroy educational institutions. There are a ton of information jobs that will soon be radically transformed, just like the print media has been. As for the cultural argument, that's actually not a big driver for cities. Most of those young people soon move to the suburbs, after they get over the city. However, the main reason cities have done well is economic, not cultural, and the internet is about to deal a great blow to the economics of cities.

 
At 2/13/2011 8:05 AM, Blogger H.A. Black said...

Mark, I link the printing press to the Protestant Reformation and how more information easily accessible diminishes the power of the establishment. I think the most current example is Egypt. See
http://haroldblack.blogspot.com/2011/01/save-our-kids.html

 
At 2/13/2011 8:39 AM, Blogger Jason said...

The printing press is one of the less heralded, but quite possibly, most important developments in human history.

The next major innovation would probably be wired communication, followed by wireless communication, then the electronic age brought us the internet.

Now with internet and pervasive information overload, I have a questions: Would I be the only one who would have an issue with decline in information quality with the death of professional print media? Or is there really no actual decline, just more information and the same percentage of misinformation?

 
At 2/13/2011 11:42 AM, Blogger morganovich said...

this is an interesting study, but it shows only correlation, not causality.

it would be VERY interesting to see a few test cases of cities that had printing and banned it as test cases to see what causes what.

this still does not rule out an external variable driving growth and printing (like permissive vs authoritarian government) but it would bolster the argument somewhat.

however, it seems to me that it it just as likely that the sorts of cities that allowed printing presses are also the sort of places people wanted to live and could more easily prosper.

it's almost never just one variable in situations like this. generally, you need a confluence of several things together.

people often talk about the railroads as a huge driver of prosperity, but they tend to quote selectively. railroads were the last piece in some places, but in others, they added little growth.

i recommend bernstein's fantastic book "the birth of plenty" on this topic.

it may be the best piece of economic history i have ever read.

 
At 2/13/2011 3:08 PM, Blogger VangelV said...

Historians argue that the printing press was among the most revolutionary inventions in human history, responsible for a diffusion of knowledge and ideas, “dwarfing in scale anything which had occurred since the invention of writing” (Roberts 1996, p. 220). Yet economists have struggled to find any evidence of this information technology revolution in measures of aggregate productivity or per capita income (Clark 2001, Mokyr 2005). The historical data thus present us with a puzzle analogous to the famous Solow productivity paradox – that, until the mid-1990s, the data on macroeconomic productivity showed no effect of innovations in computer-based information technology.

Are historians idiots or do they not understand human nature? The first major uses for printing were the distribution of porn and religious texts. Neither is very good at providing increased productivity that is captured in the production figures.

Keep in mind that the main uses of photography early in the game were also religious/political and pornographic purposes. How about film? Same thing? Internet? Well, the same again. Who says that human nature changes all that much?

 
At 2/14/2011 10:28 PM, Blogger A Conservative Teacher said...

That looks like unsustainable runaway man-made growth! Imagine how much progress like that will warm the globe! 1550 is going to set a record for climate change!

 
At 2/14/2011 11:42 PM, Blogger Ron H. said...

"Imagine how much progress like that will warm the globe! 1550 is going to set a record for climate change!

Actually, I believe this is right around the time when the climate started cooling into the Little Ice Age.

 

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