Gains from innovation

Trade also makes it possible to realize gains from the discovery and dissemination of innovative products and production processes. Economic growth involves brain power, innovation, and the application of technology. Without trade, however, the gains derived from the discovery of better ways of doing things would be stifled. Furthermore, observing and interacting with other people using different and better technologies often encourages others to copy successful approaches. People also modify the technology they observe, adapting it for their own purposes. This sometimes results in new, and even better, technologies. Again, gains from these sources would be far more limited in a world without trade.
Can you imagine the difficulty involved in producing your own housing, clothing, and food, to say nothing of radios, television sets, dishwashers, automobiles, and telephone services? Yet, most families in North America, Western Europe, Japan, and Australia enjoy all these conveniences. They are able to do so largely because their economies are organized in such a way that individuals can cooperate. specialize. and trade. thereby reapins the benefits of the enormous increases in output-in both quantity and diversity-that can be generated. On the other hand, countries that impose obstacles that retard exchan, me-either domestic or international-hinder their citizens from achieving these gains and more prosperous lives.