Technological Change and Economic Growth Research Paper

Technological Change and Economic Growth - Research Paper Example Moreover, it is very essential to understand here that technology does not refer only to the information and technology but it signifies the transfer of knowledge, both theoretical and practical knowledge (Amesse & Cohendet, 2001, pp. 1459-1478) that influences the process of development positively and/or negatively. In order to understand the role of technological change in economic growth and broadly, economic development, it is very imperative to understand the definition of the terms itself that will subsequently indicate the role. Particularly, it has been an observation that economic development (Borensztein & Lee, 1995, pp. 115-124) has often been taken only in terms of economic progress of a state; in other words, in terms of its gross domestic production. However, in current era, economic development is more than an increase in GDP and various factors play a role in determining positive or negative economic development of a country. ... Here, one can notice various indicators in this list cannot be analysed quantitatively and therefore, economic development is more than quantitative progress of a country. The World Bank (2013) data confirms strong relationship of technological change with economic growth of countries. Analysis of its findings has indicated that countries that have invested more in technological advancements, especially in the sectors of education and business have been successful in providing basic facilities to its population, which has resulted in their overall economic growth and/or development. In other words, when a government ensures secure and encouraging social environment by working towards increased technological advancements, it automatically results in higher economic growth of the country. This surely is an indication of the role of technological changes that facilitates economic growth of a country. While the paper includes discussion on the role of technological change in economic gro wth of a country, it will be inappropriate to overlook the particular role of multinational enterprises that they play by bringing FDIs especially in developing countries. For many decades, quantitative indicator of economic growth (Victor, 2008, pp. 5-11) has remained an essential requisite for developing countries to transform into modern and developed economies. In the year 1972, Gould (pg. 1) defined economic growth as â€Å"the sustained increase in real per capita incomes.† Here, one can see that economic growth does not consider short-term alterations since it focuses on ‘sustained increase’. In this regard, one cannot overlook the significant role of