Scientific advances and technological innovations raise living standards by
increasing productivity (economic output per unit of labour and capital
input). Advances in technology allow workers to produce more in less time
using fewer inputs of capital and resources. STEM skills help raise productivity
over the long term by contributing to technological progress. People with
STEM skills are needed to create scientific advances; to apply these advances
to develop technologically improved products, equipment, and processes; and,
most importantly, to get the most out of new technologically sophisticated
equipment and processes. Although there are many types of innovation that
can increase productivity, long-term productivity growth seems to rely ultimately
on scientific and technological progress. Having the appropriate level of
STEM skills and STEM literacy in the labour force may therefore be necessary
(but not necessarily sufficient) for technological innovation in the long term,
although the relationship between available skills and innovation is highly
complex. Innovation is a non-linear and dynamic process that occurs within
a complex ecosystem of actors, with firms as the central agents of innovation
(see CCA, 2013c, 2013a).