Technology and International Differences in Growth Rates
Author(s)
Fagerberg, Jan
Abstract
In the theoretical literature on growth, technological progress is conceived either as a free good, as a by-product of other economic activities, or as the result of intentional research and development (R&D) activities in private firms. All three perspectives have some merit. However, models that do not include the third source overlook one of the most important sources of technological progress in capitalist economies. When individual studies of the impact of technological gaps and other factors on differences in economic growth across countries are examined as a whole, a rather consistent picture emerges: the potential for “catch-up” is there, but it is only realized by countries that have a sufficiently strong social capability – those that manage to mobilize the necessary resources, including investment, education, and R&D. The results of the analysis show that many of these factors should be seen as complements rather than substitutes in economic growth.
