This paper proves that technology is a primary factor of modern economic growth.
Using some technology-related variables (R&D personnel, R&D expenditure), I analyzed the contribution of technology (R&D) to economic growth. Purposes of this paper are (1) Analyze the contribution of technology to economic growth (2) Analyze the trend of economic growth in Korea (3) Analyze the economic growth of OECD countries. (4) Compare with the contribution of public R&D and business R&D. (5) Consider the influence of technological competence.
As a result, Paul Krugman's assertion that there will be a limitation to economic growth in Korea without technology improvements is not supported any more. There has been a positive contribution of technology (R&D) to economic growth since about 1990s in Korea. The contribution of technology (R&D) to economic growth is greater as time goes by because there has been a huge technology (R&D) investment from 1970s and technological competence and human capital have grown up. OECD empirical test showed the same result. Public R&D is more contributable to economic growth than business R&D. but business R&D is getting more important to economic growth while public R&D is getting weaker.
Of all economic growth models, R&D expenditure model is the best for empirical test. Solow growth accounting model is not a proper model because of serious overestimation problems. R&D human capital model is not a good model because of fewer observations
