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Assignment: Does Innovation Promote Economic Growth

749 Words3 Pages

NAME: MARTINS EBUNOLUWA AGBEKE

MATRICULATION NUMBER: 13AF014947

COURSE CODE: ECN 342

PROGRAM: ECONOMICS

ASSIGNMENT: HOW DOES INNOVATION PROMOTE ECONOMIC GROWTH

What is innovation?
Innovation can be described as a process of translating an idea or invention into a good or service that creates value or for which customers will pay. It is a process in which new products and services are developed through Research and Development and activities that originate in market competition. Innovation does not necessarily mean creating something new, it also means improving upon something that already exists. It generally refers to changing or creating more effective processes, products and ideas and can increase the likelihood of a business succeeding.
What is Economic Growth? Increase in a country’s productivity and is measured by comparing the GNP (Gross National Productivity) in a particular year with the GNP of the previous year. Economic growth is an improvement in quality of life to the people of the economy. …show more content…

There are two ways of increasing the output of an economy: 1.) by increasing the number of inputs that is used in production. 2.) By using the same input to get more output. A simple model can be given to describe how innovation fosters economic growth INNOVATION BASED PRODUCTION- Basic Research---Invention---Development---Production---Production Improvement. This will lead to production employment, business attraction, business expansion, business diversification. From the definitions above it can be seen that innovation will diversify the economy. I am going to be focusing primarily on Diversification. Diversification in an economy is a strategy used in entering a new market or industry which an economy or an organization is not currently in the

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