the emergence of mass production, created initial periods of employment and wealth shifting but eventually

led to greater well-being and economic growth. After difficult transition periods and sometimes economic

meltdowns during the “installment” phase of widespread new technologies, many economies and the people

within them have benefited from prolonged periods of economic and lifestyle improvement, including lower

unemployment and better quality of life.

Most prior innovation periods, such as the Industrial Revolution, had one significant downside: negative

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13.2 • How Governments Can Encourage Innovation 313

impacts on the environment, such as pollution and habitat destruction. Perez notes that our current

revolution—in information and communications technology (ICT)—has the potential for significant positive

externalities related to the environment. ICT is shifting many areas of society (and therefore industry) to
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