The Aspects Of Technological Growth And Economic Growth

Economic growth is very important for economy because it determines the employment rate, wealth of nation and standard of living of economy. Technological progress has many aspects. It may mean, new and better products with large amount of quantity. For given amount of capital and labor, productivity or output can be increased through technological progress. Moreover it also reduce number of worker to achieve certain amount of output. Technological progress in Solow model introduces a new variable “E”, which is labor-efficiency. Labor efficiency means that how well productive or efficient labor is in producing goods and services or output and this also represents our country real GDP. Because when there is more goods and services produces

High productivity cause lower average cost and when there is lower AC than price of product fell thus consumers are willing to buy more product and this will lead to high demand, meaning more profit and indirectly lead to employment because now businesses can afford to give high salaries to its workers and more importantly this will lead to economic growth because more productivity more output and hence more GDP ratio of the country. Neo-classical model and other growth models tell more about productivity and

But few scholars of industrial innovation accept this view. The industrial exploitation of scientific ideas almost always requires a substantial investment of resources. This is the conclusion of countless studies of particular industries and innovations, including those on machine tools (Rosenberg, 1963), aircraft (Constant,1980), synthetic hemicals (Freman, 1982), metalurgy (Mowery and Rosenberg, 1989), and semiconductors (Dosi, 1984), to name but a few. According to these studies, firms have invested in new technologies when they have seen as an opportunity to earn profits. Moreover a large proportion of the scientific research conducted in the OECD countries is financed by private industry. In such a setting, the institutional, legal, and economic conditions that determine the profitability of these investments surely must affect the pace and direction of technological change. Also in the less developed countries, where technical knowledge would seem to be available of the shelf learning to use that technology is far from costless(Pack and Westphal, 1986), and the rate of dissemination reflects the institutions, property-rights regime, and pricing structure that together determine the private profitability of acquiring