How does the steam engine still affect Germany's economy?

Regions that adopted steam engine technology early in the 19th century still enjoy higher wages and a more skilled workforce today.

What lessons can policymakers learn from the steam engine's impact?

The historical adoption of steam power highlights how early technological integration can lead to sustained economic growth and skill development.

Will early AI adoption benefit countries like the steam engine did?

The study suggests that early and rapid adoption of AI could lead to similar long-term economic advantages, mirroring the steam engine's impact.

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Steam Power's Legacy: Early Tech Boosts German Wages

14 Jan

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Summary

Areas with early steam engine adoption still see higher wages.
Regions with early tech adoption show more skilled workers.
Early adoption of AI could yield similar long-term economic benefits.

Steam Power's Legacy: Early Tech Boosts German Wages

A new study reveals that Germany's economic landscape is still shaped by the steam engine, over 150 years after its invention. Regions where steam power was widely adopted in the late 19th century currently exhibit average wages that are 4.3% higher than other areas.

These historically industrialized regions also demonstrate a stronger presence of technical training and university graduates among their workforce. Furthermore, they host more productive companies and a greater volume of patent filings, indicating a sustained legacy of technological advancement and economic prosperity.

Researchers suggest these findings offer valuable insights for current policymakers grappling with the rise of artificial intelligence. The historical cycle of technological change fostering skills acquisition and innovation may repeat, indicating that early AI adoption could significantly determine future economic advantages for nations.