Economic growth is the increase in the total market value of goods and services produced within a country in a year. It is often measured as the percentage increase in GDP, though GDP is just one measure of growth and does not tell us who gains from that growth or whether it is shared by all members of society or captured exclusively by corporations.
The growth in economic output is usually caused by increases in either the size of the labor force or in its productivity. Increasing the labor force allows more people to consume goods and services, but only strong productivity growth can allow everyone to enjoy the same material standard of living without working harder.
There are many factors that influence economic growth, but the most important is probably technology. New technologies improve the way we produce goods and services, allowing people to produce more with the same amount of inputs. For example, before the invention of the printing press in the 15th century, it would take months to produce just one book. But Johannes Gutenberg’s innovation made it possible to produce several books a day, opening up the production of books to the world. The same is true for the countless other products we now have access to. If we want to maintain this unprecedented growth, productivity must continue to improve. Otherwise, it will be impossible to keep up with population growth, and the quality of life for most people will decline.
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