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France is the opposite. Although its record on innovation is average, it is excellent at spreading knowledge across the economy. In the 18th century French spies stole engineering secrets from Britain’s navy. In the early 20th century Louis Renault visited Henry Ford in America, learning the secrets of the car industry. More recently, former ai experts at Meta and Google founded Mistral ai in Paris. France also tends to do a good job of spreading new tech from the capital to its periphery. Today the productivity gap in France between a top and a middling firm is less than half as big as in Britain.

During the 19th and 20th centuries businesses around the world became more “French,” with new technologies diffusing ever faster. Diego Comin and Martí Mestieri, two economists, find evidence that “cross-country differences in adoption lags have narrowed over the last 200 years.” Electricity swept across the economy faster than tractors. It took just a couple of decades for personal computing in the office to cross the 50% adoption threshold. The internet spread even faster. Overall, the diffusion of technology helped propel productivity growth during the 20th century.

Since the mid-2000s, however, the world has been turning Japanese. True, consumers adopt technology faster than ever. According to one estimate TikTok, a social-media app, went from zero to 100m users in a year. Chatgpt itself was the fastest-growing web app in history until Threads, a rival to Twitter, launched this month. But businesses are increasingly cautious. In the past two decades all sorts of mind-blowing innovations have come to market. Even so, according to the latest official estimates, in 2020 just 1.6% of American firms employed machine learning. In America’s manufacturing sector just 6.7% of companies make use of 3d printing. Only 25% of business workflows are on the cloud, a number that has not budged in half a decade.

Horror stories abound. In 2017 a third of Japanese regional banks still used cobol, a programming language invented a decade before man landed on the moon. Last year Britain imported more than £20m-($24m-) worth of floppy disks, MiniDiscs and cassettes. A fifth of rich-world firms do not even have a website. Governments are often the worst offenders—insisting, for instance, on paper forms. We estimate that bureaucracies across the world spend $6bn a year on paper and printing, about as much in real terms as in the mid-1990s.

Although the economics can sound abstract, the real-world consequences are crushingly familiar. People stuck using old technologies suffer, along with their salaries. In Britain, average wages at the least productive 10% of firms have fallen slightly since the 1990s—even as average wages at the best firms have risen strongly. According to Jan De Loecker of ku Leuven and colleagues, “the majority of inequality growth across workers is due to increasing average wage differences between firms”. What, then, has gone wrong?

Three possibilities explain lower diffusion: the nature of new technology, sluggish competition, and growing regulation. Robert Gordon of Northwestern University has argued that the “great inventions” of the 19th and 20th centuries had a far bigger impact on productivity than more recent ones. The problem is that as technological progress becomes more incremental, diffusion also slows, since companies have less incentive and face less competitive pressure to upgrade. Electricity provided light and energy to power machines. Cloud computing, by contrast, is needed only for the most intensive operations. Newer innovations, like machine-learning, may be trickier to use, requiring more skilled workers and better management.

Business dynamism fell across the rich world in the first decades of the 21st century. Populations aged. Fewer new firms were set up. Workers moved companies less frequently. All this reduced diffusion, since workers spread tech and business practices as they move across the economy.

In industries run or heavily managed by the government, technological change happens slowly. As Jeffrey Ding of George Washington University notes, in the centrally planned Soviet Union innovation was world-beating—think of Sputnik—but diffusion was non-existent. The absence of competitive pressure blunted incentives to improve. Politicians often have public-policy goals, such as maximising employment, that are inconsistent with efficiency. Heavily regulated industries make up a big chunk of Western economies today: such sectors, including construction, education, health care and utilities, account for a quarter of American gdp.

Could ai break the mould, diffusing across the economy faster than other recent technologies? Perhaps. For almost any firm it is easy to dream up a use-case. No more administration! A tool to file my taxes! Covid-19 may have also injected a dose of dynamism into Western economies. New firms are being set up at the fastest pace in a decade, and workers are swapping jobs more often. Tyler Cowen of George Mason University adds that weaker firms may have a particular incentive to adopt ai, because they have more to gain.

ai can also be built into existing tools. Many coders—maybe most—already use ai on a daily basis owing to its integration in everyday coding instruments through Github’s CoPilot. Word processors, including Microsoft Word and Google Docs, will soon roll out dozens of ai features.