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13 - Proximate Sources of Growth

Capital and Technology

from Part II - Factors Governing Differential Outcomes in the Global Economy

Published online by Cambridge University Press:  03 June 2021

By
Rajabrata Banerjee ,
Robert Inklaar  and
Herman de Jong
Edited by
Stephen Broadberry  and
Kyoji Fukao
Stephen Broadberry
Affiliation:
University of Oxford
Kyoji Fukao
Affiliation:
Hitotsubashi University, Tokyo
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Summary

This chapter outlines how the development, diffusion and adoption of new technologies have shaped economic growth. Several major technological phases are identified, which differ from periods distinguished by global wars or major changes in growth patterns. Before 1940, large-scale industrialization and new technologies originated in the United States, diffusing to western European countries. Outside the Western core different development strategies were deployed. Only after 1940, countries in western Europe largely caught up to American productivity levels. The combination of technology diffusion and export-led growth in Japan, Korea, Taiwan, and, more recently, China and India have enabled significant growth in living standards. The changes in cross-country income-level inequality have also had their within-country counterparts. The more recent period of IT-enabled growth primarily benefited high-skilled workers in Europe and the US, while low- and middle-skilled workers not only met competition from machines, but also from workers in low-wage countries.

Keywords

Technologyproductivity growthindustrializationstructural changeInnovationhuman and physical capitalgrowth accountingdivergence and convergencelabour market.
Type
Chapter
Information
The Cambridge Economic History of the Modern World , pp. 356 - 381
Publisher: Cambridge University Press
Print publication year: 2021

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