"This paper provides an empirical assessment of the contribution of different types of knowledge to
British industrialization. Endogenous growth models are based on the premise that knowledge, ideas
and induced innovation comprise a significant source of economic development. These theories raise
fundamental questions about the nature of human capital, knowledge, skills, and other characteristics
that are conducive to extraordinary creativity, and how those factors vary over time and field of
endeavor. They imply that our understanding of economic progress requires an assessment of the types
of knowledge inputs that are in elastic supply, and how they respond to economic incentives. Walt
Rostow, for instance, contended that one of the preconditions for economic and social progress is an
advance in scientific knowledge and applications, inputs which typically are scarce in many developing
Nathan Rosenberg similarly highlights the determining role of science and specialized
knowledge in economic advances.
Others regard scientists as disinterested individuals who are
motivated by intangible rewards such as enhanced reputations and honour, the desire to benefit
mankind, or the pursuit of timeless truths, rather than material benefits. If highly specialized skills and
scientific knowledge are prerequisites for generating productivity gains, but such inputs are in scarce or
inelastic supply, this has important implications for development policy measures. .."