ABSTRACT
This chapter investigates the relationship between productivity and technological change. The question that we shall address in this chapter is whether a slow down in productivity can be explained by the slow-down of innovation activities. This chapter attempts to measure technical change in order to measure the effects of economic growth for European member states. It introduces the reader, first, to some basic elements and concepts central to the understanding of this approach. The characteristics of the innovation process such as its nature and sources as well as some factors shaping its development are examined. Particular emphasis is laid on the role of technical change and dissemination based on the fundamental distinction between codified and tacit forms. These concepts recur throughout the chapter and particularly in discussions about the nature and specifications of systems approach. The chapter concludes summarising some major findings of the discussion and pointing to some directions for future research activities.
