Revival of Growth Theory
Paul Romer $ New Growth Theory
Done by
Emin Ann Jose
Karishma Elza Varughese
Susamma Varghese
21 Nov 2016
some of the innovations are-
- Develop new and improved patent therapies.
- Genomics
- Proteomics
- Vaccines- Canadian HIV vaccine initiative worth $139 million.
- Medical devices
- Regernerative medicine
- Protien Engineerring
- Immuno-therapies
- Rearch and Development-It takes between 10- 15 years and about $ 2.6 billion of reseach and development spending to create an innovative medicine.
Paul Romer, an American Economist have made a revival of Traditional Growth Theory which is also known as Neo Classical Theory
According to Romer, two main elements of New Gowth Theory
- Knowledge- it is considered as third and most important factor of economic growth. Knowlege has different properties than other goods such as labor, capital. These propeties are ideas, innovations, inventions, discovery which enables us to do things in a better way, besides, it also makes worthless things more valuable. For example, sand and silicone chip
- Technology
Traditional Growth Theory
It states that growth is a result of two factors-
However, Romer was not satisfied with this theory because Traditional Theory failed to explain "why developing countries having immense labor and capital fail to acheive growth as developed nations?"
Canadian Pharmaceutical Sector
- An interview with Paul M Romer. (2001, November 20). Retrieved from www.strategy-business.com
- Bernard Wysock Jr. (1997, January 21). For economist Paul Romer,prosperity depends on ideas. Retrieved from www.wsj.com
- Cortright, J. (n.d.). The new growth theory ,technology and learning,A practitioner's guide
- Government of Canada. (2015). Innovation, Science and Economic Development Canada. Retrieved from https://www.ic.gc.ca/eic/site/lsg-pdsv.nsf/eng/h_hn01703.html
- Lovewell, M. (n.d.). Understanding economics ,a contemporary perspective. Making anEconomy grow,Paul Romer and New Growth theory , 291.
- Maverick, J. (2015, Aug). Investopedia. Retrieved from www.investopedia.com/articles/markets/082615/5-biggest-canadian-software-companies.asp
- Canada has one the most innovative Pharmaceutical Sector of the world.Canadian Pharmaceutical is the 8th largest in the world market with an growth rate of 0.99%.
- it is consists of companies that develops innovative and generic pharmaceuitcals.
moreover, this theory held that there is only single way of doing things, therefore, addition of labor and capital will give low output, overtime, society gets smaller and smaller returns, which is also known as Law Of Diminishing Returns. Thus, Traditional Theory supports law of diminishing returns.
Benefits from Innovations
These innovations have brought Canadian Pharmaceuticals increasing returns and have contributed immensely to the Canadian Economy.
- From 2001 to 2015, total pharmaceutical sales in Canada doubled to 24.6 billion.( PMPRB Annual Report)
- Sold 87.5% to retail drugstores and 12.5% to hospitals.
- Shipped 10.5 billion worth of drugs
- Employ 27 thousand Canadians
- Contributed 4.6 billion to Canadas GDP
- Contributed 10% to Canadian R&D
Both of these elements, leads to "Increase in Returns" that in turn leads to productivity.
Example, Software companies such as Constellation, Mitel Network Corp
Telecommunications such as Bell Canada, Shaw Communications
Canadian Pharmaceutical sector.
THANK YOU
&
HAVE A GOOD DAY
In the field of Innovation, Canadian Pharmaceutical is trying to help Canadians lives longer and helthier life.
They are trying to acheive economic growth through innovations.