There are four major sources of production and income growth. First, improvements in the skills of workers will promote economic growth. Skillful 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.
Finally, improvements in economic organization can also promote economic growth. The legal system of a country, for example, strongly influences the degree of economic cooperation. Effective economic organization will facilitate social cooperation and channel resources toward the production of goods that people value. Conversely, economic organization that protects wasteful practices and fails to reward the creation of wealth will retard economic progress. People earn income by helping others.