Using the Solow growth model, economic growth has three factors: population growth, technological improvement, and financial savings. All three factors are redu

Using the Solow growth model, economic growth has three factors: population growth, technological improvement, and financial savings. All three factors are reducing growth in the developed world. Populations are stagnant or declining, technology may be displacing more jobs than it creates, and we are in more debt than ever. So what is the root cause? Birth rates fell because of declining economic prospects, and savings declined for the same reason as well. Alone among these three factors, technology has continued its advancement, except now instead of improving labor it is a substitute for labor. There were other supply shocks, such as the oil crises and more importantly the baby boom in developing countries that made outsourcing possible. But those are transient factors in the long run. In the long run technology stands alone as the disruptive factor. We can try to mask the problem with financial debt or economic redistribution, but the problem remains that unskilled labor is no longer needed, and skilled labor is an increasingly high hurdle to clear.