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[...] In Document we can see that developed countries indeed allocate a significant and growing portion of their GDP to Research & Development. An important element is, for example, patent filing, as mentioned in Document to protect these innovations and maintain this competitive advantage. Finally, by comparing Document 1 and Document we can indeed observe the correlation between the Research & Development budget and the growth rate, particularly with Japan and the United States. At the microeconomic level, it is indeed innovative companies like Apple that are the most productive and prosperous. [...]
[...] Are labor and capital the only sources of economic growth? Subject: Dissertation SES Are labor and capital the only sources of economic growth? Since the birth of economic liberalism, economist Adam Smith has established that capital accumulation is one of the secrets of prosperous economic growth. In economic terms, the term capital encompasses all durable means of production, obtained through investment, that enable the production of goods and/or services within a company. In his philosophy of growth, Adam Smith advocates for saving, investing in machinery, land, and buildings to increase productivity, i.e., the efficiency of using production factors. [...]
[...] We can indeed observe in Document 1 that the share of labor represents a reduced portion of the country's growth rate. In Japan and Germany, this part is even negative, meaning that labor capital does not contribute to growth. The same is true for the capital factor, which in Document 1 also represents a small part of growth. Together, the two production factors constitute on average less than half of the growth rate of the different countries. It is therefore clear that a simple accumulation of these is not sufficient. [...]
[...] In conclusion, we can say that the production factors of capital and labor are essential for economic growth. However, their accumulation is not sufficient to create added value to the goods and services produced. Companies must think about how to produce in a more productive and efficient way. To do this, investments are necessary to obtain productivity gains. Also, there is the need to innovate to be more competitive and efficient, which is possible thanks to a constant investment in Research & Development. [...]
[...] To address this issue, we will analyze in the first part the insufficiency of the accumulation of these two factors in growth as well as the importance of the overall productivity of the factors. Then, in a second part, we will study the role of a third production factor, technical progress. In this first part, it is essential to recall that the factors of capital and labor are fundamental to economic philosophy. Their accumulation leads, according to liberal economists, to so-called expansive growth. However, this accumulation theory has quickly shown its limits regarding productivity and social conflicts. Indeed, possessing a large quantity of basic machines does not allow for high productivity. [...]
