What drives long-term economic growth most effectively?

Long-term economic growth is most effectively driven by technological innovation. This stems from the ability of advancements in technology to enhance productivity, improve efficiency, and foster new industries and job creation. By enabling businesses to produce more goods and services with the same amount of resources, technological innovations lead to increased output and higher living standards over time.

Innovation fuels competitive advantages, as companies that adopt new technologies can lower costs, improve quality, and offer new products that meet consumer needs better than their competitors. This cycle of continuous improvement not only propels individual businesses forward but also stimulates overall economic expansion, as the benefits of increased productivity can translate into higher wages and more employment opportunities across the economy.

While options like population increase, increased taxation, and government intervention can have impacts on economic growth, they do not drive sustained long-term growth to the same extent as technological innovation does. Population growth can contribute to an increase in labor supply but without the accompanying technological advancements, the productivity of that labor may stagnate. Increased taxation can reallocate resources but does not inherently stimulate new economic activity. Government intervention can sometimes help rectify market failures or support industries, but it does not create the foundational advancements in productivity and efficiency that innovation does.