Learning-by-doing is a concept in economic theory by which productivity is achieved through practice, self-perfection and minor innovations.
An example is a factory that increases output by learning how to use equipment better without adding workers or investing significant amounts of capital.
[4] The concept of learning-by-doing has been used by Kenneth Arrow in his design of endogenous growth theory to explain effects of innovation and technical change.
[6] Xiaokai Yang and Jeff Borland have shown learning-by-doing plays a role in the evolution of countries to greater specialisation in production.
[citation needed] The Toyota Production System is known for Kaizen, that is explicitly built upon learning-by-doing effects.