ABSTRACT
It is well known that productivity improvements fueled by technological change have contributed to a level of economic well-being that is higher today than at any time in our nation’s history. Further, sector-level increases in productivity growth coupled with consumer preferences have substantially changed the economic landscape of the United States over the last century. In 1900, for example, farming (agriculture) was the largest sector of the US economy. During the twentieth century, the number of farm workers decreased dramatically, while farm output grew fast enough to feed a growing population and have a surplus remaining for exports. In the second half of the twentieth century, manufacturing has followed a similar course-output grew continually while employment decreased. In both of these sectors, R&D led to innovations that significantly increased productivity and freed up labor for alternative uses (services).
