A large economy supports innovation by providing sufficient consumer demand to recover fixed experimentation and invention costs, supply chains for required materials, and a large labor force for experimentation.

“producing like having there be consumers that would actually pay enough for you to recover your fixed costs of doing all the experimentation and the invention you need the supply chains to exist to deliver the germanium crystals that you need to do grow in order to come up with a semiconductor you need a large labor force to be able to help you do all the experiments and so on”