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The solution is in technological breakthrough


There is very low probability to achieve substantial increase in economic growth by technological breakthrough in productivity. Technological breakthrough of this significance that could ignite substantial economic growth means- technological breakthroughs that will create entirely new range of products, with entirely new essence, bringing some new system that will change our daily life. Let me give you an example from the past. In the country i come from, about 25 years ago it was hard to get phone installed in your house.  In some locations you had to wait for years until the government owned phone company connected you to the network. In that time the energy production represented about 10% of the GDP and the phone network probably 1%. Then the phone company was privatized and within a year everybody could have phones and even more than one.  About 20 years ago appeared the first mobile phones. They were expansive, heavy, producing bad quality voice etc. And today the share of phone companies all together represent higher share in the GDP than the Electricity producers. And don’t think for a moment that the absolute value of electricity consumption was reduced. This i call a essential change of economic environment or change of economic paradigma. I could mention several other not less important developments that enabled to create economic growth in the last 25 years, without to  create an artificial demand by government stimulus supporting over-consumption, as it happened with the car industry at 2008. (By the way i am not against creating such short term measures, with certain positive effects on environment, while hoping that this stimulus will help for enterprises to bridge over relatively short period of crisis,  i just see it as a good negative example).  As i said, such a new product, that has in its power to change our way of life and more than that, doesn’t appears out of the blue. There has to be a predisposition of need, about which we may know or we may not know. I see fields, that apparently need a change of paradigma, like energy, environment, etc. If you follow the new technological discoveries, you will  find many new findings, that are very promising in these fields of need, like the field of solar energy or exploitation of gas resources. If i am right, within next 10 years most of the energy needs will be satisfied from this source, and this change from oil to gas will have big impact on the economic growth and our environmental footage too. The fusion reactor is probably more than 50 years away. Even if the technology would be solved within 10 years, to build new reactors instead of the existing ones, will take an additional  50 years. It is not so with gas as alternative to oil and coal.

And then there is always a chance that an entirely new product will appear on the market that will change the paradigm of our life. If you know economic history of Europe, you will know that in the mid 19 century there was big economic growth, when the railways were laid. At the seventies most of it was done and a long economic crisis came, that ended at middle of nineties, with appearance of motor cars, that ignited a whole range of new needs and opportunities as well.

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