What is typically the result when investment in technology rises?

When investment in technology rises, efficiency and productivity typically improve due to several key factors. Enhanced technology often leads to the development of more efficient production processes, allowing firms to produce goods and services with greater speed and lower resource input. This means that employees can focus on higher-value tasks instead of spending time on manual or repetitive work.

Additionally, advanced technology can facilitate automation, resulting in a more streamlined production flow and reduced waste. As a result, output per worker tends to rise, which not only enhances productivity but can also lead to economic growth as businesses are able to produce more goods at a lower cost, potentially increasing profitability and market competitiveness.

In contrast, if investment in technology were to lead to stagnating productivity levels or increased production costs, one would expect to see businesses struggling to maintain efficiency, which is contrary to the expected outcomes of technological advancements. Similarly, a significant decrease in labor demand would typically arise from automation and efficiency improvements, but this does not negate the overall positive impact of increased technological investment on productivity.