Information and Communication Technologies for Financial Innovations
This chapter focuses on the impact of the new technologies on the development of the financial system, in particular with regard to the financial markets. Due to the prevalence of the equity ETFs, the discussion concentrates on the impact of ICT on the st
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Information and Communication Technologies for Financial Innovations
3.1 ICT as General-Purpose Technologies General-purpose technologies (GPTs—hereafter) are path-breaking innovations, which are one of the most important elements enhancing long-run technological progress, as well as profound changes across economies and societies (Sahal 1981; Bresnahan 2010; Coccia 2017). Rosenberg and Trajtenberg (2004) label such innovations as “epochal innovations,” radical innovations which emergence we observe during consecutive technological revolutions and which demonstrate enormous ability to reshape world economy. As claimed in Helpman (1998), general-purpose technologies enforce overwhelming changes in many sectors of national economy; they foster creation and introduction to markets of new products, services, and process. As GPTs possess huge ability to introduce society- and economy-wide structural shifts, Freeman and Soete (1987) claim that these special technologies generate changes in socioeconomic paradigm and thus support the process of economic growth and development (Bresnahan and Trajtenberg 1995; Helpman 1998; Lipsay 2002; Ruttan 2006). Conceptually speaking, general-purpose technologies may be also defined as revolutionary changes from current patterns (trajectories) of technological change (Bresnahan 2010); and as we read in Calvano (2007), these path-breaking inventions may lead to the “destructive creation” making results of “past technological revolution” out-of-date and obsolete. As argued in Lipsey and Carlaw (1998) or Coccia (2005, 2010), GPTs once come to a wide use of economic agents; they impact pervasively various forms of economic activities and doing business and, hence, drive overall and usually permanent changes in economic structures. Coccia (2005) states that general-purpose technologies are technologies having the highest and the most intensive impact on society and economy. Generally speaking, “GPTs are characterized by pervasiveness, inherent potential for technical improvements, and ‘innovational complementarities,’ giving rise to increasing returns-to-scale, such as steam engine, the electric motor, and semiconductors” (Coccia 2017, p. 292). Jovanovic © Springer Nature Switzerland AG 2019 A. Marszk et al., The Emergence of ETFs in Asia-Pacific, https://doi.org/10.1007/978-3-030-12752-7_3
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3 Information and Communication Technologies for Financial Innovations
and Rousseau identify three major features of general-purpose technologies. These are pervasiveness, meaning that the impact of these innovations spreads overall all sectors of economy and is assimilated by significant share of social and economic agents; improvements, meaning that GPTs undergo permanent improvements over time, which allows for lowering the cost of their adoption and usage; and innovation spawning, meaning that broad GPT adoption makes it easier to invent and produce new products and process (Bresnahan and Trajtenberg 1995). Evidently, from historical perspective, certain GDTs demonstrate specific dynam
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