General Purpose Technology - Lag

Lag

The introduction of a new GPT to an economy may, before improving productivity, actually decrease it:

• the obsolescence of old technologies and skills
• learning costs
• time required for development of new infrastructure
• readjustment of labor to new industries, causing temporary unemployment

This initial inability to exploit the benefits of the new technology is known as the Solow Paradox. New technology can also be isolating. The internet, originally created for faster communication between people, can cause you to search for someone random and foreign to connect with.