An important determinant of economic development is technology. This means the use of sophisticated technical methods or equipment in the production process. This results in the better utilization of the means of production, increase in efficiency, and a reduction of the production cost. Additionally, the quality of production will be raised and quantity of production increased too.
There are three common conditions for the use of technology, however, and they are:
• Necessity of more capital investment and industrialization;
• Presence of entrepreneurs who are capable of funding technological expansion; and
• Widespread market for goods, so that technologies may be utilized on large scale. Clearly, this describes advanced economies with full development in place. Most underdeveloped countries tend to lack one or more of the requirements, and will usually be force to import any sort of technologies. Thus, we can see how directly related technology is to economic growth.