Technology and economic growth

Introduction/Significance of the Problem

This is in an age of amazing technological transformation compelling people to consider the association between technology and economic growth. Fundamentally all economists agree that productivity growth is the key to doing better over the long term.  A standard of living of any nation is the most important sign of national economic performance. The technology and economic growth combination yields human development. Technological innovation has been serving as the definite key driver for long-standing economic growth. This ever-revolving world is at a foremost speed, and technology is essentially at the heart of this revolution.  The core of economic world is truly moving with pace.  It is quite fascinating and noteworthy that the journey of the world economic, which took so many years now takes very less time, signifying from a regional viewpoint, is that there is increase of middle class, boost in buying power, economic growth, and rising demands and anticipations from the population. The innovation process thus needs to be encouraged by an intricate set of social bodies. Innovation still remains to be lacking a market-driven phenomenon. I analyse the function of the technology and economic growth in Australia. In particular, I talk about the ways through which the technology can help improve productivity development and overall economic growth.

 Analysis

The contribution of technology and economic growth has been the important subject of the increasing literature. Technology is an important factor strongly influencing the economic growth. The availability to technology and its practice in economic processes facilitates the viable position in the global labour division. At present there are same kinds of chances and prospects with technology, industries are experiencing a number of important forces and are altering paths at which businesses use technology same like what the servers and microprocessors did twenty five years ago. For that reason technology proves to be a driven force for the economies. It is believed to enhance the productivity and eventually can cause a better flow of goods and services, and more people participation in the international market.  Economists have played an essential role in the identification of contribution of technology in the growth of economics. They believe that improving productivity and making the growth of economic of Australia using technology are key priorities for the country. Technological innovation based on research plays a key role in addressing these priorities. Partnership between publicly funded organisations for research and business is important to improving the conversion of research into industrious outcomes that boost the nation’s output. Nevertheless, there remain deep systemic obstacles to raising this partnership in Australia.  The increasing technology mediated largely by forces of market are believed to cause rising competence in production, and thus to rising people’s living standards.

The connection between economic growth and technology has been included in a huge number of previous models for all through the life.  The first ever neoclassical models for example Solow (1956) considered technological revolution like an exogenous variable, demonstrating how long-term economic growth only relied on (exogenous) technological change.  Another model i.e. Arrow (1962) highlighted technology and said that it progressed at a steady pace, and found that economic growth for long turn basis significantly counts on the population growth. A lot other models presented technology growth  as being the growth of economy of a country. Some recent kind of models include Aghion and Howitt (1992) and Grossman and Helpman (1991) and these all models share the trait that a sustained increase in the extent of resources paid on the formation of novel technologies rings about a constant increase in the economic growth.

A great number of research have established that the rush in productivity in the Australia during the later 90s has been mainly the consequence of the implementation of novel technologies. For example, a research is carried out by Plumb (2013) and they found that the information technology has led to about one half of the boost in the productivity during last couple of years.

Economic growth has obvious benefits for the whole country and leads to a wider economy. Technology is without any doubt one of the quickest rising industries both in the global and local economic area. With a lot of counties accepting policies and forming frameworks that will facilitate then stay proficient and pertinent, expansion in this field has yet to arrive at unimagined boundaries. Technology, particularly communications and information technology, has caused a change to the economy with the advantages and optimistic outcomes being noticed in all levels. Existence of humans is varying and trade and improved standards of living are being appreciated. The use of technology can offer a number of benefits to the economy.

Employment: The technology sector is regarded as one of the principal sector for offering direct employment. It is expected that by the end of 1020 there will be a predictable growth of information technology and computer related work by 22.5 percent, illustrating about 700,000 jobs. In fact, for each job set in the technology sector, there are believed to be extra six to seven jobs produced somewhere else. This will absolutely come with better salaries and a broad variety of products and services.

Input to growth of Growth Of The Gross Domestic Product (GDP):  It has been noticed that technology offers a vast contribution on the GDP in different countries, including Australia. Considering ICT for example, a boost of 10 percent in dissemination of broadband interprets to a 1.5 percent enhancement in the GDP expansion in promising markets. Worldwide, this boost in connectivity, particularly in the 3G arena has provided for a 0.57 percent of growth of GDP. This expansion has been rebuffed by growth in the e-commerce and SME.

Labor force uprising:  There is a newest means in which public get things completed. Labor can be sub-grouped into little tasks and then service providers outsourced. Small work platforms like freelancer have allowed entrepreneurs to reduce charges while receiving excellent services from experienced workers all over the world at the click of a mouse. These arenas then have the overflow results to other areas like the money transfer and payment methods.

Appearance of new-fangled services and business: Technology has experienced the increase of more services and products in trade. As an issue of consideration, more services and products have turned out to be increasingly digitalized and obtainable in the market and even on internet. The commencement of cloud computing is among the trademarks of transformation and upgrading. Surfacing of the App business for example is solely technology based and is the result of the Information Communication Technology. From each and every aspect of economy, there are several way in which technology has observed the origin of services and products in new aspects.

Novelty in business: More businesses are adopting the trappings of technology. Many of the businesses- about 90% of them- have an online presence for instance. Technology therefore has brought in new ways of reaching to customers. Other than better ways of reaching to customers, better quality goods and services are entering the market thanks to technology. Improved efficiency and streamlining of services has been crucial in propelling growth in the economy. There is much less loss that occurred from pilferage and abuse of company resources like time and vehicles for personal gain. Technology has therefore been a powerful tool in growth of businesses at all levels.

However, for several years economists had been doubtful about the effects of a number of technologies on economic growth and combined productivity. In fact, many of the other suggested that technology had only contributed very small to the overall growth of economics during early 1990s.