What Advances the Economy?
People would argue the efficiency of the population in which it grows. Individuals wonder is it the knowledge that advances the economies or is it the physical capital that advances the economies. Well, we are going to take the time out to really assess the worthiness of having knowledge and the worthiness of physical capital. The two factors differ in a lot of ways that can be consistent in whether either or is a better outcome for the progress of the world in total.
One of the first factors that we are going to consider is knowledge. Knowledge is so special to economic progress of the economies because it is believed that to be educated is to have more understanding in the process of things. Knowledge is said to be facts, information, and skills acquired by a person through experience or education, the theoretical or practical understanding of a subject. Throughout many countries or even the United States many individuals take up trades and majors that give them the necessary ability to perform very efficiently when It is that time to. When people are in their studies of gaining knowledge, research plays a major role. In that aspect alone research offsets, a lot and comes with development and innovation of many tools and technology. Another great speculation that knowledge creates is the distinction between social and private returns that can be relatively classified as externalities; When knowledge becomes a leak that’s when economists can figure out the rate of return. For example, is it an increasing return, decreasing return, or constant return?
Physical capital is considered a factor of production, in other words the input of the production process. They are clearly not the same but in the long run they would somehow correlate with each other and go hand in hand. Knowledge most helps a country grow because the more educated people we have, the more we have a surplus of doctors, entrepreneurs, economist, accountants. Each of the ones listed contributes heavily and interact with the consumption whether its goods or services that the people within society gives them. The more knowledge individuals intake, the more experience they gain. They become smarter in everything they do.