New technologies tend to be adopted slowly and—even after being adopted—take time to be reflected in higher aggregate productivity. One prominent explanation is that major technological breakthroughs create the need to reorganize production. We study a unique setting that allows us to examine this mechanism: the adoption of mechanized cotton spinning during the first Industrial Revolution in France. Using a novel hand-collected, plant-level dataset from French archival sources, we show that a process of “trial and error” in reorganizing production led to initially low and widely dispersed productivity across firms operating the new technology. In the subsequent decades, we observe high productivity growth as knowledge diffused through the economy and new entrants adopted improved methods of organizing production.
Technology adoption and productivity growth: evidence from industrialization in France
Squicciarini, Mara P.;
2024
Abstract
New technologies tend to be adopted slowly and—even after being adopted—take time to be reflected in higher aggregate productivity. One prominent explanation is that major technological breakthroughs create the need to reorganize production. We study a unique setting that allows us to examine this mechanism: the adoption of mechanized cotton spinning during the first Industrial Revolution in France. Using a novel hand-collected, plant-level dataset from French archival sources, we show that a process of “trial and error” in reorganizing production led to initially low and widely dispersed productivity across firms operating the new technology. In the subsequent decades, we observe high productivity growth as knowledge diffused through the economy and new entrants adopted improved methods of organizing production.
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