Effects of information technology on workers and economic performance

As discussed in previous chapters, and especially with reference to both Figure 8.2 and equations (9.2) and (9.9), indigenous R&D entails a fundamental investment in the innovation process and one that drives productivity growth at all levels of aggregations. To a lesser extent, so too is purchased technology that enters the firm’s production process in the form of new capital equipment. Such purchased technology embodies the innovations, and hence the R&D, of those firms producing new capital equipment.