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Cultivating Long-Run Economic Growth in the Republic of Ireland: A Very Brief Glance

Cultivating Long-Run Economic Growth in the Republic of Ireland: A Very Brief Glance

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Author

Tom McDonnell

Summary

New ideas and   their subsequent diffusion are the ultimate source of long-run quality of   life improvements. In many respects the stories of economic growth and human   history are the stories of technological change and changing beliefs and   ideas. Economic   growth comes from the accumulation of labour and capital inputs combined with   improvements in the productivity of labour and capital arising from on-going scientific progress and   technological change.

Sustainable long-run growth in per capita output depends on innovation driving improvements in labour productivity. Investing in education and skills (human capital), equipment and infrastructure (physical capital), and in the production, diffusion and use of new ideas, is the only way to sustain growth in productivity over the long-term. Insufficient investment in skills, infrastructure and innovation will constrain future economic growth. Underlying all of this is the need for a supportive institutional architecture to incentivise innovation and ensure the efficient use of labour and capital.

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