Outside the Box: Why the internet revolution is nothing to email home about

Part one of a four-part series on the faith many investors are placing in technology stocks — and how they could be disappointed.

Innovation entails a series of discontinuous, highly significant technological leaps, followed by gradual adoption and modest incremental improvements.

Economist Robert Gordon argues that the Second Industrial Revolution, entailing developments in electricity, internal combustion engines, modern communications, entertainment, petroleum/hydrocarbons, and chemicals, has had the most impact on productivity and living standards.

By comparison, the Third Industrial Revolution, based around computing and the internet, appears to be less important.

The technology revolution’s reduced impact is the result of its focus and structure.

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