International Business : What Role Does Innovation? Essay
What role does innovation? Are the new technologies able to revolutionize the economy? They have done so in the past and, for a dozen years, the information and communications technology illustrate the processing capacity and the growth potential of innovation. These new techniques, like all revolutions, however, necessitate the invention of a new economic model.
1. Innovation increases productivity
Technological progress leads to growth because it increases productivity. It is obvious to new production techniques, a little less for new products. New production assets, besides those that are more productive than those they replace, widen the choice of contractors. This increased variety gives them the ability to tailor their investments more specifically to their needs, thus to obtain higher productivity from these investments.
The argument of the variety also applies to consumer goods. Economists assuming a preference for variety, which seems generally satisfied for many goods. Moreover, new products meet existing needs. They can not impose and replace old products unless they meet more effectively the needs of consumers.
The impact of technological progress on productivity can be offset. It so happens frequently that significant progress take a long time before leading to marketable products or services. One explanation for this delay is the extent of the organizational changes that require the development of innovation. One can…