Capitalism promotes innovation in a free market economy

Capitalism promotes and rewards innovation from people and companies. Innovation is encouraged for both goods and services at all levels. Companies invest in research and development in an effort to create better products so that they can sell more and increase their profits. This leads to huge advances, especially in fields like medicine and technology. The system also rewards companies for constantly making improvements to already existing products and technologies.^[1] Capitalism creates an incentive for companies to constantly strive to keep improving because that is how they can earn the most money. These continual improvements benefit consumes because it leads to more choices of goods. Due to the competitive nature of capitalism, citizens also have an incentive to work harder. People know that with creativity and hard work (the backbone of innovation) they can become the next Bill Gates or Jeff Bezos. This results in a culture of productivity that increases overall efficiency, allowing for civilizations to develop rapidly as new technological advancements are being made.

[P1] Under capitalism, people have incentives to work harder, leading to higher productivity and increased innovation.