The amount of land is fixed
The amount of labour grows in its own sweet way
The amount of capital (plant, buildings, machinery) grows from investment
Investment can be generated from within (endogenous) or from without (exogenous) - ie from savings or from outside investment
In the equations used by classical economists to explain how economies grow & prosper these 3 factors were given capital letters
But the equations did not always give the right answers when actual growth was compared with what had been predicted
So they stuck in a little t - technological change - to explain the difference. Bit like gravity & the movement of the planets really
Then light dawned. Technology is itself a factor of production
Technology can grow from pinching other peoples ideas (exogenous) or we can grow it ourselves from within
How?
The answer is simple, stupid
Education! Education! Education!
