There are four major sources of production and income growth. First, improvements in the skills of workers will promote economic growth. Skilful workers are more productive. Education, training, and experience are the primary ways people improve their skills. Second, capital formation can also enhance the productivity of workers.
Workers can produce more if they work with more and better machines.
Fourth, improvements in economic organisation can also promote economic growth. The legal system of a country for example, strongly influences the degree of economic cooperation. Conversely, economic organisation that protects wasteful practices and fails to reward creation of wealth will retard economic progress. The Institute for Economic Freedom, all rights reserved.