Nelson et al.: Investment in Humans, Technological Diffusion and Economic Growth

RR Nelson, ES Phelps, and RAND CORP SANTA MONICA CALIF, “Investment in Humans, Technological Diffusion and Economic Growth” (1966).

"Most economic theorists have embraced the princip0le that certain kinds of education...equip a man to perform certain jobs or functions, or enable a man to perform a given function more effectively. The principle seems a sound one" (69).

"Thus far, economic growth theory has concentrated on the role of education as it relates to the completely routinized job" (69).

"We suggest that, in a technologically progressive or dynamic economy, production management is a function requiring adaptation to change and that the more educated a manager is, the quicker will he be to introduce new techniques of production. To put the hypothesis simply, educated people make good innovators, so that education speeds the process of technological diffusion" (70).

The author then explores two possible models of how education causes diffusion of technology.

"The general subject at this session is the relationshipo between capital structure and technolgoical progerss. Recalling that the process of education can be viewed as an act of investment in people that educated people are bearers of human capital, we see that this paper has relevance to that subject