Productivity: An Illustrative Survey

Innovation and Economic Growth

Article Snapshot

Author(s)

Theo Eicher

Source

Economic Policy Research Center, University of Washington

Summary

This paper looks at how technology makes everyone better off.

Policy Relevance

In past years, falling prices of information technology have fuelled enormous economic growth around the world.

Main Points

  • Increases in productivity make everyone better off, because workers and firms do more with the same resources.

 

  • In the world’s leading economies, the falling prices of information technology (IT) equipment and software have led to an investment boom.

 

  • Both IT-producing and IT-using industries increased economic and productivity growth dramatically.

 

  • In this new environment, economic growth is fuelled by different sectors than those that fuelled growth in the past.

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