Editing Economic growth (section)

=== Entrepreneurs and new products ===
Policymakers and scholars frequently emphasize the importance of entrepreneurship for economic growth. However, surprisingly few research empirically examine and quantify entrepreneurship's impact on growth. This is due to endogeneity—forces that drive economic growth also drive entrepreneurship. In other words, the empirical analysis of the impact of entrepreneurship on growth is difficult because of the joint determination of entrepreneurship and economic growth. A few papers use quasi-experimental designs, and have found that entrepreneurship and the density of small businesses indeed have a causal impact on regional growth.<ref>{{Cite journal | doi=10.1093/jeg/lbw021| title=Entrepreneurship, small businesses and economic growth in cities| journal=Journal of Economic Geography| pages=311–343 <!-- Bad Crossref data: lbw021 --> |volume=17 |issue=2 | date=2016-07-28| last1=Lee| first1=Yong Suk| url=https://academic.oup.com/joeg/article-pdf/17/2/311/11008876/lbw021.pdf}}</ref><ref>{{Cite journal | doi=10.1016/j.jbusvent.2017.11.001| title=Government guaranteed small business loans and regional growth| journal=Journal of Business Venturing| volume=33| pages=70–83| year=2018| last1=Lee| first1=Yong Suk| s2cid=168857205}}</ref>

Another major cause of economic growth is the introduction of new products and services and the improvement of existing products. New products create demand, which is necessary to offset the decline in employment that occurs through labor-saving technology (and to a lesser extent employment declines due to savings in energy and materials).<ref name="Jorgenson&Ho_2014"/><ref>{{Cite book |last1=Ayres |first1=Robert |author1-link=Robert Ayres (scientist) |title=Technological Transformations and Long Waves |year=1989 |page=9 |isbn=3-7045-0092-5 |publisher=Novographic |location=Vienna, Austria |url-status=dead |url=http://www.iiasa.ac.at/Admin/PUB/Documents/RR-89-001.pdf |archive-date=2011-07-16 |archive-url=https://web.archive.org/web/20110716175240/http://www.iiasa.ac.at/Admin/PUB/Documents/RR-89-001.pdf}}
Attributed to Mensch who described new products as "demand creating".</ref> In the U.S. by 2013 about 60% of consumer spending was for goods and services that did not exist in 1869. Also, the creation of new services has been more important than invention of new goods.<ref>{{cite book |title=The Rise and Fall of American Growth |last=Gordon |first=Robert J. |year=2016 |publisher=Princeton University Press |location=Princeton, NJ |isbn=978-0-691-14772-7 |pages=39}}</ref>