The reason is that new investment tends to embody technical innovation (which is exogenous in the neoclassical growth model) and has also positive externalities, thus creating not only private returns but also raising the social rate of return. But achieving a high growth path requires not only rising physical capital and its efficient allocation but also adequate human
capital, i.e. skilled people who work with these technologically advanced investment goods and entrepreneurs with innovative skills and the ability to find new business opportunities.