Question

How does the QWERTY keyboard demonstrate "path dependence"?

Answer 1

QWERTY has become a common term for these "lock-ins" in technology and economics, also known as "path-dependence" (a mangled piece of physics jargon). This is known to be the product of "switching costs." We take two types. One is what we could call mere switching costs; the opportunity cost of receiving, implementing and mastering new technologies. (Once you've learned to touch-type, learning a new interface is a real pain.) The other source of switching costs is due to "network externalities" or "external the returns"

Typically, economic analysis assumes constant or decreasing returns, i.e. that each additional resource unit allocated to a function brings the same or less return than the last unit. Improved returns stand on its head: resource unit n+1 has a higher return than unit n. Most real-world manufacturing innovations are showing growing returns, simply because they work more efficiently at high volume rates, but what we're looking at here is different. Technology per se is not more effective when it is more commonly used, but is more useful

The more popular QWERTY keyboards are, the more convenient it is to learn them instead of, say, ABCDEF or the Dvorak keyboard. The more people know how the QWERTY interface is, the easier it is to market it, rather than one of its rivals, and the easier it is to buy it for your staff. As a consequence, the number of QWERTY keyboards in use is increasing, and this is due to the importance of the "network" of these keyboards. Leaving the network imposes a switching burden, even though there is absolutely no difference in the intrinsic value between the product and its competitors.