CHAPTER ONE

1. INTRODUCTION

1.1   BACKGROUND OF STUDY

Economic growth, by definition, is the increase in the inflation adjusted market value of the goods and services produced by an economy over time. It is conventionally measured as the percent rate of increase in real gross domestic product (real GDP), usually in per capita terms (IMF, 2012). Growth is usually calculated in real terms to eliminate the distorting effect of inflation on the price of goods produced.

Since economic growth is measured as the annual percent change of gross domestic product (GDP), it has all the advantages and drawbacks of that measure. The rate of economic growth refers to the geometric annual rate of growth in GDP between the first and the last year over a period of time. Implicitly, this growth rate is the trend in the average level of GDP over the period, which implicitly ignores the fluctuations in the GDP around this trend. An increase in economic growth caused by more efficient use of inputs is referred to as intensive growth. GDP growth caused only by increases in the amount of inputs available for use is called extensive growth.

Historically, technology has played a central role in raising living standards across the region. The Green Revolution and various innovations of modern medicine and public health have been instrumental in improving nutrition, health, and livelihoods of millions of poor people. Agricultural and medical biotechnology hold tremendous promise but also bring with them new risks and concerns that need to be addressed before their full potential can be realized.

New information technologies are only beginning to diffuse widely in developing Asia and the Pacific, but ultimately these too can have profound impacts on the lives of the poor, empowering them with access to information that once was the preserve of the

privileged few (OECD,2002).

Advances in science and technology have continuously accounted for most of the growth and wealth accumulation in leading industrialized economies. In recent years, the contribution of technological progress to growth and welfare improvement has increased even further, especially with the globalization process which has been characterized by exponential growth in exports of manufactured goods.

(Hippolyte, F., 2008) shows that the widening income and welfare gap between Sub-Saharan Africa and the rest of world is largely accounted for by the technology trap responsible for the poverty trap. Technological progress, technological development, technological achievement, or technological change is the overall process of invention, innovation and diffusion of technology or processes. In essence technological progress is the invention of technologies and their commercialization via research and development, the continual improvement of technologies, and the diffusion of technologies throughout industry or society.

In short, technological progress is based on both better and more technology. In economics, change in a production function that alters the relationship between inputs and outputs. Normally it is understood to be an improvement in technology, or technological progress. Technological change is a change in the set of feasible production possibilities (Hicks,J.R.,1963).

Total factor productivity is used to measure technological progress (Crespo, R.J., 2005). Study on total factor productivity for Indonesia was intensively conducted by Sigit, Hananto (2004); Socia Prihawantoro, et al, (2009; 2013). Technological progress and economic growth are truly related to each other.

Boskin & Lau (1992) indicated that in developed countries, technological progress contributed about 49 to 76 per cent on economic growth. According to Solow (1957) the contribution of technological progress on American economic growth was 87.5 per cent. Technological progress has improved working conditions, permitted the reduction of working hours and provided the increased flow of products.

They are encouraged to make more and more investment in the economy. It helps to generate capital formation and the rate of growth automatically increases.

1.2   STATEMENT OF THE PROBLEM

        The technology can be regarded as primary source in economic growth and the various technological changes contribute significantly in the development of underdeveloped states. The challenges as regards to economic growth and technological changes could be that the underdeveloped state may not see anything wrong with their economic growth let alone improving it through changes in technology. It could also be that there are no funds in circulations in the state for the kind of technological changes that would make the state to be regarded as economically developed. It could also be that there are no man powers or that the federal government policies are not favourable to the states, it could even be a security problem that would not allow the state to grow technologically. Finally, several researches have been carried out on the impact of technological changes in the economic growth of Nigeria, but not even a single research has been carried out on the economic growth and technological changes in cross river state.

1.3   AIMS AND OBJECTIVES OF STUDY

        The main aim of the study is to examine the economic growth and technological changes. Other specific objectives of the study include;

1. to determine the influence of technological changes on the economic growth of Cross River state.
2. to determine the factors affecting technological changes and its effect on the economic growth of Cross River State.
3. to determine the extent to which economic growth affects the technological changes in Cross River state.
4. to proffer possible solutions to the problems.

1.4   RESEARCH QUESTIONS               

1. What is the influence of technological changes on the economic growth of Cross River state?
2. What are the factors affecting technological changes and its effect on the economic growth of Cross River State?
3. What is the extent to which economic growth affects the technological changes in Cross River state?
4. What are the possible solutions to the problems?

1.5   STATEMENT OF RESEARCH HYPOTHESIS

H0:  Technological changes has no significant effect on the economic growth of Cross River state.    

H1:      Technological changes has a significant effect on the economic growth of Cross River state.

1.6   SIGNIFICANCE OF STUDY

The study on the economic growth and technological changes will be of immense benefit to the entire people of Cross River state in the sense that it would encourage technical changes in the state like technologically improving their tourist centre which might lead to the growth of the economic among others, that technical changes leads to the growth of output and productivity. As a result, per capita income is increased.

On the one hand, consumption of the household raises, while, entrepreneurs start saving, generating more and more surplus. The level of technology is also an important determinant of economic growth. The technological progress keeps the economy moving. Inventions and innovations have been largely responsible for rapid economic growth in developed countries. It has been observed that major part of increased productivity is due to technological progress. Technological progress is one of the most important determinants of the shape and evolution of the economy.

The rapid rate of growth can be achieved through high level of technology. The study will also educate the government of Cross River state to bring in expertise so as to help build and improve the technology of the state thereby leading to the economic growth of the State.  Finally, the study will contribute to the body of existing literature and knowledge to this field of studies and basis for further research.

1.7   SCOPE OF STUDY

        The study on the economic growth and technology is limited to Cross River state.

1.8   LIMITATION OF STUDY

Financial constraint- Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).

Time constraint- The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.

1.9   DEFINITION OF TERMS

Technological Change    A technological change is an increase in the efficiency of a product or process that results in an increase in output, without an increase in input.

Economic Growth  An increase in the amount of goods and services produced per head of the population over a period of time.