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There are different reasons why some nations grow faster than other across the globe. In this respect there are different theories that have been developed over time to explain economic growth or rather development in different economies across the globe. One of these theories is the New growth theory. First, New growth theory emphasize on the important of acquisition of new forms of technology, knowledge and skills as key components of economic development. in this regard, a nation or rather an economy can be able to develop substantially when its harnesses the new forms of technology that are available across the globe and utilizes human knowledge and skills in implementing this technology within its economic structures (Cortright, 2001).

In reference to Cortright (2001), the New Growth Theory focuses on economic growth as a result of increasing returns that are associated with new knowledge (p.2). Notably, this theory assumes that any government that is reluctant in adoption of new forms of technology while at the same time discouraging the existence of competition with an aim of protecting certain industries or firma will in the long run create a situation of retarded economic growth. Therefore, this theory will be used to help in analyzing why some nations are able to grow faster economically than others. The two nations that will be used to support this theory are Kenya and Malaysia, with an examination of their economic development in the last fifty years.

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To begin with, Malaysia is a South-East Asian nation that consists of thirteen states. This nation gained its independence in 1957 from the United Kingdom and became a federation in 1963 that comprised of Singapore, Sabah and Sarawak. More importantly is the fact that Malaysia as a Southeastern Asian nation was able to develop from a third world nation into a developed countries within a span of less than 50 years. Currently, it is counted as one of the Asian tigers among them China, Japan, India and Hong Kong. This is irregardless of the fact that there are many other nations that were on the same level as Malaysia during the time of its independence that have had a stagnated growth and have lagged behind in terms of economic growth. Malaysia, at the time of independence had a population of about

 Kenya on the other hand is an East African country that obtained its independence in 1963. Notably, Kenya and Malaysia were colonized by the British or rather the United Kingdom. It is worthy to note that Kenya is endowed with a lot of natural resources that could enable it to develop substantially if only these resources are utilized properly. However, this has not been the case and in most cases, its resources were wasted or rather possessed by a few elite in its society. With this in mind, Kenya remained as a third world country despite the fact that it has enough resources that could spur it to a developed country.

Research Findings and Discussion

According to Cortright (2001), New Growth theory addresses the issues of why some nations have been able to grow at a very high rate while the growth rate of other remains relatively slow (p.2). The approach of this theory embraces the aspect of diminishing returns in the sense that whereas other factors of production in the society are limited as a result of diminishing returns, the knowledge has the ability to drive the economy since ideas can be shared in an infinite number of times. This is further strengthened by the fact that these ideas that emanates from a certain piece of knowledge can be reused countless number of times (p.2).

According to Arnold (2008), New Growth Theory calls attention to the process of discovering and formulating ideas (p.368). Therefore, the aspects of innovation play a critical role in any form of development in terms of the economy under this theory. In line with this, economies that focus on generating new ideas especially in terms of technological know-how were found to be at a better place of development rather than those that failed to embrace technological aspects within their economies. Following these argument, some countries across the globe have been found to be poor since they lack materials and other tangible things such as capital goods and natural resources (p.368).

Nevertheless, the above argument can be countered easily in the sense that there are those countries across the globe that have been able to develop economically irrespective of the fact that they lack the necessary materials such as natural resources. Their secrets of development lie in the fact that they have ideas and other forms of technological know-how that is critical to any form of development. This in mind, it is important to understand that economic development of any country lies not in the resources that such a nations can be able to raise at a particular period of time but rather skills, knowledge and ideas that invested in these resources in order to create a production process. Therefore, economies across the globe have to create an environment whereby new ideas can be fostered (Arnold, 2008). Most of these ideas result in innovation leading to efficiency and a change in the ways things are done in such an economy.

It was therefore found out that there are many reasons why some nations across the globe have developed at a high rate than others in the last 50 years. First, most of the nations that have developed at a high rate focused on introducing new forms of technology within their economies (National Research Council: Office of Special Projects, 1999). In line with this, there are different strategies that have been followed by these countries as they seek and implementation of new ideas. One of these strategies is through education. Most of the developed countries have focused on creating a favorable learning environment for its students. In this regard, these learning environments have embraced teaching of technological courses as one of the ways that could be used to improve their economy. More important is the emphasis on application of this technological knowledge and ideas in the economy especially in the private sector.

Salvadori (2003) asserts that education is an important factor that aids in any development process in an economy (p.159). Following this line of thought, it must be understood that most of the ideas that have found their way in different countries across the globe are as a result of education. For instance some of the Asian tigers send their students to Western countries to acquire education and them return home and apply what they learnt in their home economies. This was able to transform these economies from third world economies to developed economies. However, countries that have failed to focus on educating their citizens have been found to lag behind economically. In other words, the level of illiteracy in any society determines by a large margin how a particular country would develop with countries that have a high illiteracy level being less developed as compared to countries that have a low illiteracy level.

Similar, there are countries that have been found to develop or rather grow very fast economically as compared to their counterpart because of the fact that most of these countries have created an environment that encourages new ideas, knowledge, inventions and innovation. Importantly, such environments do encourage entrepreneurs to seek out for new ways of production rather than relying on the old, inefficient ways. In regard to this, the second half of the 20th century saw a greatly aligning of nations across the globe as most of them sought out for ways of embracing new forms of technological production rather than relying on the traditional methods. In this case, both the manufacturing and the agricultural economies across the globe improved their production mean and enhanced their efficiency through the introduction of new forms of technology (National Research Council: Office of Special Projects, 1999).

Apart from embracing technology know-how and new ideas as a way of fostering economic growth, countries that have developed faster have also worked on perfecting their manpower. It is important to note that manpower or rather human resources and capital is the most important resource that an economy can have to help it develop faster. Therefore, education and other factors play a critical role in human resource development. One of the factors is the creation of economic structures that promote equity in distribution of resources in regard to human resources. There are different ways through which this has been achieved. To begin with, these countries have focused on eliminating every form of corruption within their boundaries and creating a system to promote good and accountable governance. With these structures, these economies have been able to distribute their resources in an equitable manner thus providing an opportunity for each of their citizens to prosper.

On the other hand, new ideas or forms of technology alone cannot in any way eliminate poverty and enable an economy to develop at a faster rate. There is also need to create structures that promote efficiency. This is done through eliminating any form of wastage in the economy. In order to eliminate inefficiency, these nations have worked on reducing wastages by recycling what is termed as wastages in other countries whose development rate is still very low. As a result, whereas they may have a limited access to different forms of resources, the resources that are acquired by these countries are utilized well. In line with this, there are several countries across the globe that has been able to move from third world countries to developed countries. On the other hand, there are other countries that have stagnated on the same scale of development. Among these countries is Malaysia and Kenya (Nyong’o, 2007).

It was found out that Kenya and Malaysia share some similar economic background. To begin with, both countries were colonized by the British and therefore have a similar social and economic background in terms of economic, political and social structures. Remarkably, these countries had majority of its citizens below the poverty line in 1963 at the times of their independence. It is also worthy to note that both countries, apart from being colonized by United Kingdom, they also gained their independence at nearly the same period of time with Malaysia gaining its independence in 1957 while Kenya got its independence in 1963.

Therefore, these nations, inherited political, economic and social structures that had been laid down by the British rule. According to Nyong’o (2007), Kenya and Malaysia were on the same level in terms of economic development in 1963 at the time when Kenya obtained its independence. However, over time, Malaysia was able to create structures that promoted the aspects of economic development. In line with this, whereas Malaysia managed to grow into a developed country, Kenya stagnated economically over the same period of time. Therefore, Kenya remains as a third world country whereas Malaysia is a developed country.

There are major differences that can be spotted between the two nations. To begin with, Malaysia followed manufacturing industry path as one of its most important strategy towards becoming a developed country. With this in mind, it is argued that on many occasions, Malaysian economy grew with a high as 9%. Such rate of economic growth is hard to obtain, leave alone maintaining it over a long period of time. On the other hand, Kenya chose to focus mainly on agriculture without necessarily introducing new methods of farming within their economic development structures (Nyong’o, 2007). The path that was followed by these countries towards economic development defines their greatest differences. Apart from this, the economy of Malaysia eliminated disparities in distribution of resources thus enabling its human resource to develop equally especially in regard to education. On the contrary, Kenya failed to create such structure and instead accumulated its wealth among the few elite in the society while majority of its citizens have lives under great poverty without resources to develop themselves.

These two countries portray in an excellent manner what happens when certain economic development issues are ignored. In this respect, the New Growth Theory applies well to Malaysia that continued to seek for new forms of ideas and knowledge in order to enhance its economy. Kenya on the other hand allow itself to be pulled into economic development stagnation in such a way that it was not able to develop well despite the fact that it has all kinds of resources that can enable it to develop by high economic rates. The ability to harness the power of new ideas especially in the manufacturing industry helped Malaysia to take a path that would see it emerge as developed country across the globe (National Research Council: Office of Special Projects, 1999). Kenya on the other hand failed to foster an environment that would embrace new ideas and technology in its development thus leading to a retarded economic growth.


In summation, economic growth is one of the most important aspects of any economy. In this respect, there are different theories that have been developed over time to explain the aspect of economic growth in any economy. In consistent with this, the New Economic Growth remains as one of the most recent formulated theory that focuses on the place of technology and new ideas in any developing economy. Following these points, Kenya and Malaysia are clear example of countries that have followed totally different paths of economic development, thus leaving these countries at two extremes, i.e. developed country for Malaysia and third world country for Kenya. This is irrespective of the fact that these countries were at the same level of economic development in 1963.

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