ABSTRACT
This chapter describes that to be successful an innovation required much more than technological expertise. It also discusses that the speed at which innovations are adopted by firms, and by consumers, will determine the extent to which innovations will increase output—both that part of the increase in output that is measured in the national accounts, and that part that is not. The increase in the input of labour is made up of two component parts. One part is the change in the quantity of labour, which is given by the growth of employment adjusted for reductions in weekly hours of work and for changes in the age–sex composition of the labour force. The second part is the improvement in the quality of labour. Labour inputs are usually measured in terms of men or in man-hours: thus the quality of labour is implicitly assumed to be unchanged over time.
