Dr. Velayudhan of Department of Economics and Finance, at Montclair State University, New Jersey

Technological innovation is one of the factors that influenced world economy right from the eighteenth century . The classical economists identified the theoretical link between innovation (creation, dissemination and application of knowledge) and economic growth during the last decades of the 18th century. In 1776 Adam Smith first posited theory connecting knowledge and economic development in his book ‘Wealth of Nations’. However, Smith theory remained as a showpiece until Nobel Laureate Gary Becker (1964) came forward with the view that people are a type of economic asset (human capital) that increased investment in skills, and knowledge provides future returns to economy through increase in productivity of labor. Consequently, economy becomes knowledge-based rather than physical resource-based, like land, labor and capital. Economists no longer emphasis physical capital in their growth models but intangible capitals, which includes, R & D, patents, number of scientists. Several technological innovations contributed significantly to this transition. Computer, Internet, television and cell phone are some of the important technological innovations that influenced current economic development. Internet and cell phone made communication very simple and easy. Countries like Japan and the United States contributed significantly to these inventions. Because of these technological achievements they became the top advanced economies of the world. Further, for the past two centuries, the United States has been the world-leader in developing innovative products and services (Torun 2007). Small firms in US contributed significantly to this achievement. Small businesses often act as a source of innovation contributing critical share of innovative breakthroughs of U.S. Prior to the industrial revolution United States business was small business. The industrial revolution was instrumental to change this trend. The second half of the nineteenth century was a period of transition from small businesses to big business due to the influence of industrial revolution. First in this series was the establishment of railroad and telegraph in 1860. Henceforth, large firms appeared in various sectors. However, small firms sustained its role in invention, employment generation and contribution to GDP. Innovations of small firms in the 20th century includes the airplane, fiber optic examining equipment, the heart valve, the optical scanner, the pacemaker, personal computers, contact lens and Zipper (SBA 2009). Currently, small firms tend to specialize in high tech, high growth industries, such as biotechnology, pharmaceuticals, information technology, and semiconductors. Small business patents tend to be more significant than large firm patents, outperforming large firms in a number of categories including growth, citation impact, and originality (SBA 2008, 2009). Further, they create a significant share of private employment and contribute to the major share of GDP. In sum, small business plays a significant role in technological innovations of the United States, which is a main source of economic development.

Biography: Dr. K.V. is currently working as adjunct professor, Department of Economics and Finance, at Montclair State University, New Jersey and research consultant at Synergy Microwave Corporation, New Jersey. He is a Ph. D in Applied Economics from Cochin University of Science and Technology, Kerala, India and MBA from Rutgers, Business School, The State University of New Jersey, US. Dr KV has authored and co-authored books: “Economic Development of Kerala: Retrospect and Prospect”(2010), and Dimensions of Economic Development: Spacial and Sectoral Perspectives (1998). He has published articles on Economic Development in various Journals, and has presented papers in various national and International conferences.

Email:

Address:14 Dina Lane, , Somerset, New Jersey, United States, 08873

Dr. Velayudhan of Department of Economics and Finance, at Montclair State University, New Jersey

Biography:

Email:

Address:Somerset, New Jersey, United States