# How can a positive relationship between capital per effective worker and technological change be explained?

I'll get to the point: so, in the context of theories of long-run economic growth, I understand at a basic level that, in the Solow model, there is a negative relationship between capital per effective worker (K/AL) and technological change () - higher amounts of technological change means it is harder for firms to keep with up new innovations in capital terms.

In contrast, there is, supposedly (speaking in very simplified terms) a Schumpeterian-type ('market for inventions') model, where there is a positive relationship between K/AL and technological change, because technological change is determined, in part, by K/AL, as this increases the supply of 'innovations'.

I do not understand how an increase in K/AL would increase the supply of innovations within this model - would someone please explain for me why this relationship might hold true?

I don't understand in which context $\frac{K}{AL}$ increases supply of innovations. What spurs innovation in Schumpeterian type growth models is the labor allocation in R&D (or spendings in R&D). This increases the creative destruction rate in the economy. For example, in this case, a decrease in labor $L$ can be consiidered as an increase in labor allocation in R&D.
Or another possible interpretation that I can make is the following one. There exists a stock effect in Schumpeterian models. This means that if your knowledge stock $A$ is high enough, it would be difficult to make new innovations. (See Acemoglu 2009, chapter 14)
So, in this case a higher $\frac{K}{AL}$ implies more innovation.