Technological Change and Economic Growth

Without economic growth a country cannot grow itself as a whole. To understand the role of technological change in economic growth, we must first explore economic growth. Economic growth is the increase in a nation’s real gross domestic product per person over time. There are two types of growth, the positive and the negative. Some of the positive effects are better living standards, better health care, and material abundance. It also has negative effects such as environmental destruction, and increased income inequality. With each invention over the past 150 years or so, it has made economic growth easier. Even little things can make a big difference in production which can lead to greater production and more profit which in turn helps the GDP grow as well as the economy.
There are tradeoffs with the technology growth, for example the invention of the cell phone. It makes everything so much easier and more convenient, but because of that people are getting rid of their household lines, thus causing phone companies to lose money, with less profit coming in they are forced to lay off people. Another way to look at it is, that those cell phones now create new jobs for people because they need to be manufactured and produced. This provides jobs and the company profits helping the economy grow. With how fast technology is expanding and making its way into the work force and making everyday lives easier it is also costing us as well. People are inventing things that only take one to do the job of twenty men. This makes items cheaper, but at what cost? The cost of jobs? Maybe, but it also can help as well by encouraging people to learn new things to expand their knowledge so they can find new jobs, skills sets, and opportunities they might not have had if they stayed in the same job for their entire lifetime. It also encourages people to go back to school to get an education so they can find a better paying job, or get a job working on the machine that replaced them. It’s a very touchy subject to most economist.
There are so many technology indicators that could be used to evaluate a country’s ability to grow and prosper. After evaluating a few, I made my decision based on what I think is important. I picked health as the most important. If you don’t have healthy people to work, attend school, or take care of people then it’s hard for an economy to grow let alone a country. Health is very important not just to keep people from getting sick, but also to keep those healthy and living longer so they can give back more to the economy. The average lifespan of a fit person is going to be longer than that of an obese person, or having a food service person who is sick being around food that is being served to healthy people with the potential to infect others which would cause them to miss work and cause production to reduce. Its little things that can have an effect health wise that are important and help to keep things functioning. A country needs a good health care system too, say a worker gets hurt on the job and can’t afford help or there is not a health care system to take care of the worker. The worker may never recover or take longer to recover and get back into the workforce, which negatively affects the economy.
Education is also a big factor in the economy. Education not only helps the economy grow but it also helps reduce poverty. The more education an individual has the more skills, and knowledge they can bring to the plate when it comes to work and giving back which helps the economy grow. As I talked about before, let’s say a person is educated in harvesting crops, and the employer he works for buys a mechanical harvester and lays those people off. If that person chooses to go back to school and educate themselves they could be the one driving the mechanical harvester or even better they can be the one who designs the next best thing. Human Capital in the form of education is one of the greatest assets a person can have. By gaining knowledge you are gaining power to help yourself, help others, and help the economy grow.
Next I’d have to say that Science and Technology (S&T) would also be an important factor. Without Science and Technology we wouldn’t be where we are today as a country and economy. S&T which I will use from now on, allows us to make discoveries and invent new things. S&T apply to all of the other indicators as well. S&T allows for discoveries, which could be a cure for a certain disease that would in turn make the health indicator improve because less people would be sick and or dying from such diseases. S&T also helps to invent and develop new technology or improve on already existing technology to make it more productive. Such as the computer, it opened the world to many vast new things, without the computer I wouldn’t be able to sit here in the comfort of my own home taking this class and improving my human capital. Without the computer, I would have to stop working and attend a class at certain hours instead of when it’s convenient for me.
Lastly, I’d choose Infrastructure. Infrastructure helps determine the success of manufacturing and agricultural activities. Infrastructure could be included in urban development. If you have a well-developed infrastructure it contributes to the overall well-being of a country. This could include such things as water and sanitation to houses and businesses, transportation, and many other things as well. Infrastructures support social and cultural advances and growth in both the country, the people, and the economy. Country | Health(Life Expectancy at birth) | Education(Labor Force) | Science & Technology(Researchers in R&D) | Infrastructure(Roads paved) | Israel | 82 | 3,178,244 | No data | 100% | Denmark | 79 | 2,938,344 | 6,390 | 100% | Uganda | 54 | 13,426,420 | No data | No data | Japan | 83 | 66,696,963 | 5,189 | 80.1% |

The life expectancy at birth numbers are from 2008 – 2012. Life expectancy has gone up over the years because of other indicators such as Science and Technology. Life expectancy is important, because as people grow older a country will need people to replenish the population so that the country will continue to grow or maintain its contributions. If you look at the chart you can see more developed countries such as Japan and Israel have a higher life expectancy rate, but if you look at the under developed countries such as Uganda, life expectancy is only age 54. This could be because of other indicators such as Health. Health concerns could be such questions as: are they receiving the proper vaccinations or health treatments? The life expectancy could also be because of Science and Technology, do they have scientist to work on those vaccinations and treatments or do they have to rely on other countries for support? Even Education, does Uganda have enough people educated and using science to help with discoveries of vaccines and cures?
The labor force is accounting for all people ages 15 and older that meet the International Labor Organizations of economically active population. This includes people working, first time job seekers, unemployed, and armed forces. Surprisingly, while Uganda is the most under developed country out of the countries I picked, they still have a larger labor force than the more developed countries such as Israel and Denmark. This could be due to the differences in the population and in education levels. The population is larger, less educated, and families are started at a younger age. All of these factors would require more people working to help meet the needs of the family. In Uganda, because the country is poor the whole family is working just to put food on the table. The whole family including the husband, wife, and many kids over the age of 15.
Countries investing in Research and Development are more likely to prosper and grow. This is because inventions and discoveries that are made from R&D can improve everyday lives and make things a lot easier and less labor intensive. Having less labor intensive jobs could lead to improved life spans from less strenuous work, and more human capital because people will need to education themselves to either become the scientist to discover the item, or because they need to know how to work the new machine that is going to improve their way of life and help to expand the economy.

The Infrastructure numbers are from 2008-2012. The percent is based on all of the country’s roads. This means out of all the known roads in that country what percentage of them are paved instead of dirt, gravel, grass etc. The more roads a country has the easier it is to transport goods, services, and people to jobs, other businesses, and places. This can improve import and export capabilities and improve the overall economy.

Of the countries I chose Japan had the best statistics across the board. They have a gigantic work force to help the economy stay as one of the top 10 in the world. They invest wisely in R&D, infrastructure development such as roads, and they have one of the best education systems in the world which leads to their high Human Capital. Lastly, because they invest so much in Human capital which leads to better Science and Technology they now have one of the longest life spans in the world as well.
Comparatively, when you look at Uganda, the government is in shambles and constantly dealing with civil wars and other political problems. They don’t have a good economy at all. Their money isn’t worth hardly anything, they can’t afford to invest in Science and Technology. Uganda does not even have an accurate account of the roads in the country, and their lifespan isn’t very long either; 54 years on average.
I used Japan and Uganda as the extreme countries on the spectrum to compare and contrast on how different the world is when it comes to economic investment and output. Most countries sit in the middle and fluctuate back and forth between the extremes.
As a conclusion some of the policy recommendations I would propose as a system of incentives and programs to help maximize the economic growth in these countries would be more of a slow and steady approach instead of trying to inject the economy with a figurative “steroid” to get it jump started faster than it can handle and have it crash harder.
For Japan there isn’t much I would suggest they seem to be on the right track as far as economic growth. Israel would be a bit different, whenever a country is at war in their home country, it’s hard to deal with economics because they fluctuate so much. According to the World Bank statistics they are doing fairly well and slowly growing economically. They have their ups and downs like every country but for the last few years Israel has been a slow and steady increase. Denmark has been stabilizing also with a little increase the last 2 years. Some things such as Denmark's school enrollment has dropped 1% which isn’t bad but if it continues to drop I would suggest implementing an incentive for people who continue to enroll in school, such as a tax break for either them or their parents depending on age, school grade etc. For Uganda, this would be a very tricky one. This country's government is constantly in a state of civil war. One way the region can stabilize is if Uganda can start to put policies in place to improve their infrastructures, such as roads, so that supplies can be better transported to smaller villages and towns. Having more supplies will allow Uganda to improve its schools, buildings and houses. This would improve human capital, morale, and overall way of life. After infrastructure is addressed then Uganda can start to improve in its other indicators and slowly make its way up the economic chain and out of the lower extreme.

Bibliography

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