Technological Change and Labor Productivity

Technological change refers to the development and application of new tools, methods, and processes that improve how work is done. When businesses adopt these innovations, they can produce more goods or services in the same amount of time, leading to increased labor productivity. Essentially, technology allows workers to accomplish tasks faster and more efficiently, which not only raises output but can also enhance the quality of products. This boost in productivity can contribute to economic growth and higher wages over time, benefiting both businesses and employees.