Capital Deepening

Capital deepening refers to increasing the amount of physical capital—such as machinery, tools, and equipment—per worker in an economy. By investing more in capital for each worker, productivity tends to improve, leading to higher output and income. Essentially, it’s about equipping workers with better or more efficient tools, which helps them work more effectively. This concept is important for economic growth, as a higher capital-to-worker ratio often results in better wages and increased overall prosperity. It’s different from simply adding more workers; instead, it focuses on enhancing the quality and quantity of capital per individual.