IT is dogma that innovation is key to raising worker productivity – the single most important determinant in driving economic growth and hence, living standards.
The practical logic is simple: whenever innovative products or services come to market, productivity rises and the economy gets wealthier. That’s what happened in the past two centuries. As a result, living standards had risen dramatically. Nobel laureate economist Robert Solow demonstrated that up to 40% of all productivity and growth gains in the United States during the first half of the 20th century came from “technical progress.”