Technological Adaptation and Long Run Growth

Most of us probably learned back in intermediate macroeconomics about long-run growth. Moreover, we also probably learned that innovation and technology is the true driver for long-run growth; yet, we also just learned the dynamics behind what drive the adaptation of technology in networks. What if the another portion of the driving force in long run economic growth isn’t merely the rate of technological innovation and advancement, but also the rate at which the majority of the population adapts new technologies?

We know that new technologies and innovations allows society to allocate and use scarce resources “better”; We can do more with less. By doing more with less, we make ourselves “richer” and hence better off. I believe it is a safe assumption that companies, the government & the military, and universities are always attempting to develop new technologies and innovate. It’s profitable to do so and it makes society as a whole better off. Thus, entities will continue to innovate.

However, these advances mean absolutely nothing unless they’re put to good use; they must be adopted by the majority of the masses, firms or individuals. Think about the technological advances in the past five years. In the past ten years. Think about how much “better off” we are because of these advances and how much more efficient we can be in the workplace. We have computers and software that cuts down complex tasks to mere minutes. Want to a triple integral? It takes most of us at least a few minutes to do. Wolfram Mathematica can do it a just a few seconds and it gives you a visual along with it.

But these revolutionary programs mean absolutely nothing unless we begin to use them. Moreover, as more people adopt these programs and technologies, the more we are productive and hence the better off we become. Therefore, if more individuals or firms adopt technologies at a higher rate, the better off we will be.

In conclusion, long run growth may not be just driven by technological advances, but rather a combination of the rate of technological advance and the rate by which we adapt these new technologies and innovations. Firms and entities will continue to innovate and build new technologies, but all this means nothing if it’s not being put to good use. Hence, the rate by which we adapt new technologies also influences long run growth.