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Posted: February 24th, 2022
Background:
A nation’s standard of living is the most significant indicator of national economic performance. Economic growth is considered the most powerful engine for generating long term increases in standards of living.
In today’s world economy, technology is a key factor that has a strong impact on economic growth both in short and long term. Thus, economists have become accustomed to associate long term economic growth with technological progress (Mokyr, 2005).
Economists identify technology as ideas or knowledge that helps to produce output from inputs. Having more technology means being capable of producing more output with a given amount of inputs.
People tend to focus on computers and the Internet as the icons of economic development, but it is the process that generates new ideas and innovations not the technologies themselves, that is the energy that sustains economic growth (Cortright, 2001). Accordingly, firms have invested in new technologies when they have seen an opportunity to earn profits.
Investment in technology contributes to overall capital deepening. The greater use of technology may help firms reduce their costs, enhance their productivity and increase their overall efficiency, and thus raise economic growth. Moreover, greater use of information and communication technology may contribute to network effects, such as lower transaction costs, higher productivity of knowledge workers, and more rapid innovation, which will improve the overall efficiency of the economy (Moradi and Kebryaee, 2005).
Research aim:
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