|Original language||English (US)|
|Title of host publication||The New Palgrave Dictionary of Economics|
|Editors||Steven N Durlauf, Lawrence E Blume|
|State||Published - 2008|
Technology is the utilization of natural phenomena and regularities for human purposes. Propositional knowledge – sets of statements about natural regularities and phenomena – provides the epistemic base of technology, whose width largely determines society’s ability to generate technology. The high social rate of return to technology leads to underinvestment in new technology, justifying some government subsidization. Only since the 18th century have producers and scientists been systematically linked, allowing technology to flourish. Technology is the main factor driving economic growth; the scope for technology transfer ensures it will continue to be so, as long as the appropriate institutions are in place.