Inovação

Innovation pessimism

Has the ideas machine broken down?

The idea that innovation and new technology have stopped driving growth is getting increasing attention. But it is not well founded

... The argument that the world is on a technological plateau runs along three lines. The first comes from growth statistics. Economists divide growth into two different types, “extensive” and “intensive”. Extensive growth is a matter of adding more and/or better labour, capital and resources. These are the sort of gains that countries saw from adding women to the labour force in greater numbers and increasing workers’ education. And, as Mr Cowen notes, this sort of growth is subject to diminishing returns: the first addition will be used where it can do most good, the tenth where it can do the tenth-most good, and so on. If this were the only sort of growth there was, it would end up leaving incomes just above the subsistence level....

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