In This Review

New Perspectives on Economic Growth and Technological Innovation

New Perspectives on Economic Growth and Technological Innovation
By F. M. Scherer
160 pp, Brookings Institution Press, 1999

The United States has seen a burst of economic growth over the past two decades, thanks partly to new technologies. But growth elsewhere has varied from spectacular (East Asia before the financial crisis) to miserable (Africa). What explains the differences? Focused on rich countries, this short volume introduces the reader to a digestible and nontechnical treatment of "new growth theory," which emphasizes risky investment in new technologies and skilled and creative human capital. The United States has been preeminent in the former while lagging behind some rich countries in the latter -- a shortcoming it could partly compensate for by allowing more immigration of foreign scientists and engineers. Scherer provides empirical support for boosting investment in research and development, including basic research, and thus attracting more bright students into science and engineering, where pay is now much lower than in law or medicine. It is also necessary to motivate prospective scientists, especially girls, in primary and secondary schools.