Innovation Is the Cornerstone of Growth

Innovation is the use of ideas and knowledge to produce new goods and services that raise a country’s standard of living. Human capital and financial capital are important drivers of innovation that lead to economic growth.

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Human capital investment has grown over the past 40 years as the percent of high school graduates enrolling in college continues to increase. The percent of college graduates pursuing postgraduate degrees increased in the late 2000s but then fell in recent years as an improved economy encouraged more college graduates to seek jobs instead.

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Venture capital firms provide financial capital to entrepreneurs to produce new products that lead to economic growth. The 2007-2009 recession dramatically reduced the amount of venture capital funds available.

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The development of high-speed rail travel (defined as rail travel over 150 mph) is an innovation that saves time and costs in transporting passengers and freight. As of January 2016, China led the world in total length (in kilometers) of high-speed rail in operation.

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The Acela from Washington, D.C., to Boston is the only high-speed rail service currently in operation in the United States, with a top speed of 150 mph.