ABSTRACT
This chapter develops a theoretical framework to investigate the contributions of technological progress, technology-related inputs and regional contextual factors to production and productivity growth. It synthesizes various types of technological progress in production and develops a general production function and growth equation with manageable expressions of technological progress embodied in capital and labor. The chapter introduces regional contextual factors into the production function and the growth equation in line with production theory and the accumulated evidence in regional science research. Any technological progress related to capital or labor must occur in spurt when some new investment or new hiring is undertaken. Technological progress should be represented only by these new capital goods and newly hired or trained employees. Labor carries knowledge and skills. The levels of educational attainment and work experience are the most important characteristics of labor input.
