Inventions and economic growth

Abstract

In the long term, technical progress is undoubtedly the most important factor of economic growth - whether the latter means an increase in the aggregate real income or one in the per-capita real income of a community. In the absence of technical advance, economic growth would be possible only at a much lower rate and within rather narrow limits. Of course, should the progress in technical knowledge come to a standstill at this very moment, economic growth could go on practically undisturbed for some time, perhaps for years, but soon enough it would necessarily slacken, and would probably completely stop in the end. Up to a point, the real income of any country could be increased by a mere reallocation of existing resources on the basis of existing knowledge without any additional net investment - that is by different rationalization methods ( especially by fuller utilization, of existing production capacities ).