Abegail T.

Valesco BS- Accountancy -IB Economic Development MWF (8:00-11:00)

Lesson 2: Classic Theories of Economic Growth and Development

Learning Activity: Essay

A. In your opinion, which of the theories will best explain the Philippines’ economic growth
and development? What type of technology is most appropriate for the country, capital
intensive or labor intensive? What are the advantages and disadvantages to the
Philippines of borrowing technologies from developed countries as opposed to
developing once own technologies? Discuss.
The Neoclassical Growth Theory offers a strong explanation for the economic growth and
development of the Philippines. This theory emphasizes the importance of three key
factors: labor, capital, and technology, which work together to sustain a steady economic
expansion in a country. By highlighting these factors, the theory outlines the essential
components necessary for a growing economy. According to the Neoclassical Growth
Theory, a country can achieve short-term economic stability by adjusting the levels of labor
and capital, as both play crucial roles in the production process and have a significant
impact on the overall functioning of the economy. Additionally, the theory recognizes the
influential role of technology in contributing to the overall growth and functioning of the
economy.
The most suitable technology for the country is labor-intensive production. The Philippines
is renowned for its compassionate, skilled, joyful, and innovative populace, and leveraging
these qualities in the production process would be a fantastic means for Filipinos to gain
recognition in the industry. Labor-intensive production allows the country’s talent to shine
and simultaneously provides employment opportunities, thereby helping to alleviate the
persistent issue of unemployment in our nation. Furthermore, promoting the country’s
goods and services would unlock numerous prospects and contribute to the economic
development.
The Philippines frequently relies on other countries for its technological needs. The benefit
of borrowing technologies from other nations is that we can customize and innovate them
according to our preferences. These technologies can serve as a reference point for
generating new ideas and developing our own technologies. However, the drawback is that
this dependency restricts our access to fresh and original concepts that could be nurtured
by our creative minds. Relying heavily on borrowed technologies hampers our growth and
stifles our creative spirit when it comes to creating something truly novel and unexplored.