How fast might an em economy grow? We have many reasons to expect an em economy to grow much faster than does our economy today. As mentioned in Chapter 13 , Competition section, the em economy should be more competitive in the sense of more aggressively and more easily replacing low-efficiency items and arrangements with higher-efficiency versions. Reduced product variety and spatial segmentation of markets help innovations to spread more quickly across the economy. Stronger urban concentration should also help promote innovation ( Carlino and Kerr 2014 ). The fact that more productive em work teams can be copied as a whole should make it much easier for more productive em firms and establishments to rapidly displace less productive firms and establishments. These factors allow the em economy to innovate more quickly. For a long time, most innovation, and most of the total value of innovation, has been associated with a great many small and context-dependent changes ( Sahal 1981 ). Most innovation has also long come from application and practice, rather than from “researchers” or “inventors” narrowly conceived. Most of the research that aids innovation is “applied” as opposed to “basic” research. Thus we expect most of this better and faster em innovation to consist of many small innovations that arise in the context of application and practice. Another reason to expect faster growth in an em economy is that ems depend more on computer technology. One might guess that a future very computer-centered economy improves at something closer to the recent rate at which computer technologies have improved. This suggests that the global em economy might double as fast as every year and a half, which is 10 times faster than today’s economic doubling time of about 15 years. Actually, there are plausible reasons to expect an em economy to grow even faster. The productive capacity of an economy comes from its capacity of inputs, such as land, labor, and capital of various sorts, and also from its level of “technology,” that is, the ways it has to convert inputs into useful outputs. Although there have been times and places where growth has been driven mainly by increases in inputs, most growth over the long run has come from better technology, broadly conceived.
Oxford Scholarship Online requires a subscription or purchase to access the full text of books within the service. Public users can however freely search the site and view the abstracts and keywords for each book and chapter.
If you think you should have access to this title, please contact your librarian.