So in the previous video, we saw that some countries took off much earlier than others.
In turn, this led to dramatically different standards of living across countries.
Some 200 years later, even though most countries started growing from pretty much similar levels of GDP per capita were tempted.
This process is the creation and adoption of new technologies. So what is technology?
Technology is the way you organise your inputs to produce output.
It is the way you combine the factors of production to achieve a certain role. The production of a certain output, for example.
If your goal is to do a simple calculation on a calculator, say multiply two by two.
What were your inputs? B First, any Labour effort?
This is the time you spent pressing those buttons on the calculator.
Second, you need capital. Your capital is your calculator equipped with your labour in your calculator.
You can produce your simple calculation in a second or two.
But imagine your calculator becomes a computer in the same amount of time.
You will be able to do a million times more calculations with a more sophisticated machine.
This is what technological progress is about an improvement in the way you combine inputs,
which allows you to do more stuff in the same amount of time or do the same product within a short period of time.
The computer in the calculator example is just one of many.
There are many more examples of technological progress.
Take, for example, how we produce light for the bulk of history.
Humankind was not only living in misery, but also living in the dark.
Around the mid 19th century, however, homes became better lit.
Public spaces became better lit. And this process continues today.
So today we're able to produce much more light than a century ago. Being better lit means you can stay productive for longer during the day.
Take also how information travels.
Today, you click a heart in your Instagram account and a person on the other end of the world knows that you know that you like their image.
But information did not travel that fast in the past. It took millions of years for that heart to reach the other end of the world.
So quickly again, the speed with which information travels improved rapidly in the beginning of the 19th century.
However, as humanity started producing ever increasing amounts of product, it also started using the environment more.
We started exploiting the exploiting the planet's natural resources more and to inflict damage on our natural habitats.
As a result, we have seen a dramatic rise in carbon dioxide emissions, as well as noticeable increase in average temperatures.
I mean, do you remember how hot this July and August were?
Personally, I felt I was dumped on a tropical island this summer.
It was all right, but unlike me, the environment was not all right.
Carbon emissions and average temperatures are higher than ever.
This is a very slow motion environmental disaster, which we need to be aware of.
Let's briefly summarise what we have seen so far.
When technologies began improving in Britain and in the 18th century, we saw a dramatic rise in average living standards.
The reason was that the novel technologies enable you to do much more in a unit of time than you used to do before.
This rise in labour productivity enabled more products to be pushed on markets,
and in turn this meant a rise in the value of goods and services the economy produced.
This process also correlated with a rapid increase in connectivity across the globe
and in how we use the environment for purposes of producing ever more product.
OK, we know what started what started technological progress, but why did technological progress occur in the first place?
What enabled technologies to rise so fast?
We will see in the next video that a special economic system with certain properties made all this possible.
