The Rise and Fall of Technological Leadership: General-Purpose Technology Diffusion and Economic Power Transitions.

The article examines how technological revolutions influence the rise and fall of great powers by contrasting two mechanisms: the leading-sector (LS) product cycle theory, which emphasizes early-stage monopoly profits in new industries, and the general-purpose technology (GPT) diffusion theory, which highlights the gradual, broad-based adoption of foundational technologies across many sectors. Through historical case studies of Britain's dominance in the first industrial revolution, the United States's rise in the second industrial revolution, and Japan's challenge during the third industrial revolution, the evidence favors GPT diffusion as the primary driver of economic power transitions. The analysis underscores the importance of institutional adaptations that expand engineering skills and facilitate widespread GPT adoption rather than monopolizing innovation in select industries. This framework also offers insights into contemporary US–China technological competition, suggesting that success depends more on broad diffusion and skill infrastructure related to AI than on pioneering isolated breakthroughs.