Although the differences in speed, technology and comfort between the telegraph and the Internet are obvious, some basic principles are common: transmission of the signal demands a sufficient line quality and the transmitter and receiver must agree on a protocol (a code book) to encode and decode the digital signals. The difference: telegraph operators had to encode and decode words to the Morse alphabet manually. Today, the encoding and decoding are done automatically. Using the Internet, digital signals are sent in packets and the processing of the received packets takes place digitally in the computer of the receiver. The telegraph and the Internet are both inventions which have led to huge infrastructure investments after their invention. They have also influenced the business strategies of companies which are not part of the telecommunication or information sectors. Today, information technology is considered ‘general purpose technology’. Following Lee and Guo the GPT character effects, that ICT. Enables complementary organizational investments and coordination, which lead to a productivity increase by reducing costs. The complementary investments are important for realizing the productivity benefits of ICT investments. Enables firms to offer new products or services; growing role of convenience, timeliness, quality and variety. Induces positive external effects (spillover effects); also enables positive knowledge spillovers, in the sense of Romer. Large diffusion in different industries and large variations of product offerings.
Telegraph and Emergence of ICT: Age of Computers
