The theory of neoclassical welfare economics largely shaped international and national agricultural policies during the Cold War period. It treated technology as an exogenous factor that could boost agricultural productivity but not necessarily sustainable agriculture. New growth theory, the economic theory of the new knowledge economy, treats technological change as endogenous and argues that intangible assets such as human capital and knowledge are the drivers of sustainable economic development. In this context, the combined use of agricultural biotechnology and information technology has a great potential, not just to boost economic growth but also to empower people in developing countries and improve the sustainable management of natural resources. This article outlines the major ideas behind new growth theory and explains why agricultural economists and agricultural policy-makers still tend to stick to old welfare economics. Finally, the article uses the case of the Cassava Biotechnology Network (CBN) to illustrate an example of how new growth theory can be applied in the fight against poverty. CBN is a successful interdisciplinary crop research network that makes use of the new knowledge economy to produce new goods that empower the poor and improve the productivity and nutritional quality of cassava. It shows that the potential benefits of agricultural biotechnology go far beyond the already known productivity increases and pesticide use reductions of existing GM crops.