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The steam engine still drives the economy in Germany. In areas where there were particularly large numbers of steam engines at the end of the 19th century, average wages are still more than 4 per cent higher than elsewhere.
Almost 150 years later, these regions still have a higher proportion of technically and academically trained workers. At the same time, they have more productive companies and register more patents. This is shown in a new research paper by the ROCKWOOL Foundation Berlin (RFBerlin). “The steam engine not only powered factories, but also changed technology and skills development across entire regions for generations. The lesson for today is that the early introduction of artificial intelligence (AI) can have long-term positive consequences,” says Christian Dustmann, Director of RFBerlin and Professor at University College London.
Sascha Becker, project leader at RFBerlin and professor at the University of Warwick, adds: "We are dealing with a positive cycle between technological development and increasing skills acquisition that was triggered by the steam engine. It is fascinating that regional income disparities today are still largely based on the spread of the steam engine in 1875. These historical lessons indicate, even though it is still very early days, that the rapid introduction of AI could once again determine which regions and countries will benefit from the advantages of change in the long term."
The analysis is based, among other things, on data from 1875 on the spread of the steam engine in the districts of Prussia, social security data for modern Germany, and patent applications in these regions in the periods from 1877 to 1918 and from 1980 to 2014.
Prof. Christian Dustmann, 0044 / 78 18 04 83 80; cd@rfberlin.com
Prof. Sascha Becker, 0044 / 78 78 75 78 11; sb@rfberlin.com
The Virtuous Cycle Between Skills and Technology by Sascha O. Becker, Christian Dustmann and Hyejin Ku; RFBerlin Discussion Paper 13/26
https://www.rfberlin.com/network-paper/the-virtuous-cycle-between-skills-and-tec...
https://RFBerlin Research Insight: ‘From Steam Power to Artificial Intelligence: What the Past Can Teach Us About the Future of Work’ by Sascha O. Becker, Christian Dustmann and Hyejin Ku
https://www.rfberlin.com/research-insights/from-steam-power-to-artificial-intell...
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