History is full of situations in which a technical breakthrough or invention created a new industry and brought about major changes across economies. Steam engines, for example, were originally so heavy and bulky as to be useful only in fixed locations such as factories. Advances in metallurgy, however, made it possible to produce engines that were both powerful and reasonably light. The result was the railroad industry, which was critical to the economic development of Europe, the Americas, and much of the rest of the world.
In more recent years, the invention of the transistor and, later, of the large-scale integrated circuit brought about a revolution in electronics. Computers, previously large, expensive, slow, and subject to frequent breakdowns, became small, cheap, fast, and dependable. When they were large and expensive, computers were usually limited to large businesses, universities, and government agencies. Now that they are small and cheap, they are everywhere: small businesses, homes, elementary school classrooms, and in the laps of airline travelers.
Technical change is frequently seen as providing a means of doing or making something faster or more efficiently. While such gains are important, they are far from the only way in which an economy benefits from scientific advances. Technical change often has the effect of breaking what were previously powerful monopolies and thereby making the economy more competitive. Railroads, for example, had a virtual monopoly on inland transportation through the end of the 19th century, but the invention of the internal combustion engine brought about strong competition from trucks, barges, and airplanes.
Breakthroughs in plastics and other materials produced competition for the steel industry, which has resulted in its being a far less important part of modern industrial economies than it was only a few decades ago. More recently, the invention of microwave, satellite, and fiber optic technology has helped speed the end of government telecommunications monopolies in countries throughout the world. In the United States, for example, American Telephone and Telegraph's (AT&T) long-distance monopoly was broken by such telecommunications firms as US Sprint and MCI.
-- Robert M. Dunn, Jr.