The Relativity of Economics and Technology

Ever since, classical economists believes that the economic status of a country is relative to the technological change and advancement of a given country.  If we take for example, the inevitable population growth of today, such growth will affect the future economy of a country.  To some countries around the world over population will cause economic down turn while in other countries low population will also cause low man power and human resource to do the labor and operate the economy.  Moreover, the concept suggest that the rise of income in a conducive economic population will slow the population growth due to the underlying concept that the rate of opportunity cost of having children will increase.  Such that, Joseph Schumpeter’s theory of Modern Growth proves that development and diffusion of new technologies by profit-seeking business people will develop economic progress.  Furthermore, Modern Growth Theory was continued by Robert Solow who was a learner and neo theorist of Schumpeter. Later Robert Solow received the novel price in the 1950s. 

The core concerns of the Modern Growth Theory highlights to the following aspects:

1. The Generation of Knowledge

2. The application of this knowledge in the development of products and process

3. The commercial exploitation of these products and services in terms of financial income generation.

Recent Studies:

The application of the theory in the modern organization depicts to the importance of R&D in the organization.  Many multinational companies of today reflects their business and marketing performance according to the technology advancement being used.  Research proves that the higher the technology being used the higher ROI will relatively affect to the whole organization.

Schumpeter Theory

Theories Discussed

Marx's Theory of Capitalism

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