Macro Markets and Machines_The Economic and Market Transformation Driven by AI_GWM report - Flipbook - Page 7
Macro, Markets, and Machines
November 2025
History shows us that this pattern is not unusual. Every major technological breakthrough has required heavy
capital expenditures before their benefits became widespread. Railways in the 19th century, electrification in the
early 20th century, fibre-optic cables in the 90s, and the build-out of cellular towers in the 2000s all required
waves of investment that laid the foundation for decades of productivity growth (Exhibit 3).
Exhibit 3 – New Technologies Tend to Require Heavy Capital Expenditures
Electrification
Railways
400
Installed Capacity (millions of kW)
U.S. railroads builds (cumulative miles,
thousands)
300
250
200
150
100
50
0
1830
350
300
250
200
150
100
50
0
1850
1870
1890
1910
1930
1920
1950
1930
200
100
2001 2004 2007 2010 2013 2016 2019 2022
Cumulative Capex (US$ billions) - LHS
Cell sites (thousands) - RHS
Fibre route miles (thousands)
300
$400
$-
1970
160
400
$200
1960
180
500
$600
1950
Fibre optics
Wireless/cellular
$800
1940
140
120
100
80
60
40
20
0
1985
1987
1989
1991
1993
1995
1997
Note: All charts are based on U.S. data.
Source: CTIA; St. Louis Federal Reserve; U.S. Census Bureau: Historical Statistics of the United State, Colonial Times to 1970 (Chapter S); Office of Management and Budget (Table
12.3); FCC; Bloomberg Finance LP; Scotia Wealth Management.
Scotia Wealth Management
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