Does Technology Affect Economic Growth?

1150 Words5 Pages
In economics, growth is mean by the increases of long-term capital per output of a country. Changing in technology is one of the major factors that impact the economic growth. In the growth of long-term, the economic environment of improving the technology can affect the productivity by more or lesser efficiency. Technology is defined as the production, qualification, utilization, and instruments of information, machines, strategies, frameworks, and techniques for association to solve the issue, enhance a previous answer for an issue, or accomplish a goal (Boundless, 2016b). The government of a developing country attempts to guarantee that the advances, aptitudes, learning, and strategies for assembling are tried and grown with the goal that…show more content…
According to William (1994), productivity measures how economic systems can use existing inputs to produce meaningful outputs. Productivity growth is limited by the production potential frontier (PPF). The PPF will only shift out and increase the potential output of the product by increasing the overall supply of inputs or the technological improvement. The shift of the PPF is because of changes of technology representation of the increase in productivity (Boundless, 2016b). Technology advancement means that there are only less or lower cost inputs are required to produce goods and services. If the production cost is low, the profits at a given price will increase, so the producer will start to produce more to get more revenue. As the production of the economy increases, the supply curve shift to the right, which means that the supply increases and the price will fall (Boundless, 2016a). Therefore, the concept of improved technology shifts the PPF outward can drives the economy towards a higher level of productivity, thereby increasing economic growth and living…show more content…
The use of the technology is related to the transformation of the market, the improvement of people's living standards and the growth of international trade. “Technology had mainly transformed in every industry in the economy. The economy continues to move forward, just like goods and services. To achieve the goal of progress and growth, the industry needs to improve or change the technology to maintain the competitiveness of other competitors in the market. (“How does technology affect the economy?”, n.d.). When the long-term economic growth, the firms using the best technology they have, to get their competitive advantage in the market. Technological progress leads to an increase in income levels and make the economy in a positive state. According to Amit Seru, “If innovation were only about McDonald’s getting ahead of Burger King, we wouldn’t really care,’’. The innovation of technology is expanding from changing and positively affect the economy. In eras of technological improving, it causes industries to increase their productivity, so the country's economy is growing and improving its financial health (as cited in Moritz,
Open Document