Technology, however, is not a particular industry or type of product. It is the collective knowledge of a society. It can be advanced, or it can be ancient. Technology is simply what society knows about production, about combing scarce resources into valuable goods and services.

Consider these examples:

• Jasper Von Zeffingstone is a computer programmer for OmniComputers. His company manufactures the latest and fastest computers. Jasper programs the computer's operating system and is clearly involved in technology, a technology that improves the efficiency of information processing.


• At home Jasper opens a can of baked beans for dinner with a manual can opener. This simple device, with cutting wheel, gears, and crank, embodies the technology of opening cans. The can itself incorporates the technology of preserving food. Not particularly modern or advanced technology, but important nonetheless.


• After dinner, Jasper yells at his neighbors through paper thin walls, requesting that they reduce the volume of their stereo. Not only is the stereo system the embodiment of an enormous amount of technology, the language that Jasper employs when communicating with his neighbors is also an important aspect of technology.

Enhanced Production

Technology is basically a two-part process. It surfaces in both inanimate objects, such as capital, as well as in people, as human capital. A can opener, as simple as it may seem, requires a person who can attach it properly to the can and turn the crank in the correct direction. Without this human knowledge, the can remains unopened and Jasper does not eat.

Technology is often embodied in capital goods. That is, productive machinery is designed that make use of this knowledge. A computer, for example, is bigger, better, and faster, because it embodies advances in silicon chip technology.

However, technology is also embodied in people. In fact, the technological embodiment in people might be the most important aspect of technology. Technology is, after all, society's collective knowledge.

When embodied in people, technology is termed human capital. Medical doctors who make use of a particular surgical procedure provide an example of human capital. Jasper using language to communicate with his neighbor offers another example.

A Source of Growth

However, similar to other sources of economic growth (building factories, exploring for minerals), the advance in technology requires the act of investment in education, scientific research, and product development. The development of technology means other activities, especially current consumption, cannot be pursued. The development of technology, as such, is not without cost.

A Key Determinant