Static growth strategies stress unskilled-labor-intensive production that requires little capital or technology, and expansion of domestic sources for raw materials. Such strategies have encouraged rapid growth of labor-intensive manufactured exports. Since costs of capital, skilled labor, and technology have been high (they are scarce), and cost of unskilled labor has been low (it is abundant), rational commercial and industrial entrepreneurs pursued profit by husbanding costly factors, exploiting low-cost unskilled labor, and expanding markets. Even in the absence of empire or hegemony, until the modern era, statically growing societies had most often expanded their absolute wealth through conquest, aggressive trade, diplomatic-political expansion, and sporadic investment in foreign projects. In proper combinations with domestic factors of production and controlled colonial commerce, additional foreign resources-- capital, materials, labor--brought greater aggregate production, reduced risks and increased wealth in the home society, and may even have increased domestic productivity.
Dynamic growth strategies prescribe policy actions and structural changes for such things as primary education, research and development, trade reform, intellectual property, and basic knowledge of how to do things. They deemphasize manufacturing, business, inflation, exchange rates, and orthodox economic, industrial, or commercial issues. These sorts of changes are the results less of economic investment or political commitment than of learning, of mastering the arts of innovation and creativity, and of diffusing knowledge through an entire society. The engines of such change are education, training, innovation, technology transfer, and establishment of knowledge-sensitive infrastructures. For an economy experiencing dynamic growth, modernization, industrialization, expansion, and improvement of living standards rely not simply on allocating additional already existing resources to production, but instead on creation of new intellectual and technological resources and innovation of new production functions.