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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