Christopher (1982) explains that economic development is the improvement in the infrastructure and better living standards. Every government has the sole objective of improving the level of economic development and improving the livelihood d of its citizens.
Innovation is the modification of an existing idea or the creation of a totally unique idea to help solve ones need. The importance of innovation in any organization is best epitomized by the establishment of a research and development department. Huge sum of money has also been allocated for innovation of new ideas.
To begin with, innovation improves the modes of production. With the improved means of production, organizations get to enhance their efficiency and reduce the wastages in production (Schumpeter, 1934). Due to this there will be a large increase in the output which results to development.
Innovation also creates new employment opportunities in any given country. Employment increase makes the idle resources put into productive utilization and this leads to new output creation. The new production lines leads to the economic growth. Constant economic growth will in the long run lead to the economic development of any economy.
Moreover, innovation results into the designing of better structures that can be employed in the development of new infrastructure. When better designs are developed, new and durable structure get to be built making the economy look more admirable and sustainable. Because of the nature of the infrastructure that is developed, little public resources would be incurred on the maintenance hence reducing the costs. This will thus lead to the economic development.
In addition, innovation has led to the improvement of the standards of living. For instance, the new methods of keeping the environment clean, economizing of the megre resources and those on the preparation of consumable goods have increased the life span of the individuals in an economy. With better health, the labour force of any given economy has been enhanced and output increased making the economy to develop.
The economic development of any given region depends a lot on the political climate that exists. Poor political situations e.g. war has led to the fall of many economies. Through innovation, solutions to the conflicts arising between individuals and economies have been enhanced. This has led to the tranquil coexistence which has thus led to the economic development.
Another pillar for economic development of any economy is trade. Trade ensures that the economies can acquire goods or services that it can’t produce for itself. If the terms of trade are archaic not much will be realized and therefore the economic development will retard. As a result of innovation, better terms of trade have been developed which reduces the cost of transactions and hence lead to economic development.
Innovation in the technological sector impacts positively on the production of better machinery. Better machinery will result into the economies of scale production which reduces the production cost. Again technological innovation has enhanced services provision which has increased revenues to the economies.
Finally, innovation in the agricultural sectors has enabled the production of agricultural commodities even in adverse weather conditions. This has boosted the food security of the economies leading to the economic development. In conclusion, innovation becomes a major factor in the development of any economy. Individuals and governments must thus aim at coming up and investing in innovation.
References
Freeman, Christopher (1982).The Economics of Industrial Innovation. London: Frances Pinter.
Schumpeter, Joseph (1934).The Theory of Economic Development. Boston: Harvard University Press.