Technology is an idea that allows more to be produced with the same inputs. Technology isn't always a new capital good or capital improvement. When technology takes the form of an idea GDP or income increases. As an example, consider my iPod Touch.
The iPod Touch is a new capital good. But I didn't buy the iPod for the product itself. I bought the iPod for the services it can provide. I now watch my favorite television show, House, listen to any music I want any time, and attend iTunes U for classes from the best instructors in the world. The iPod as increased my demand for complementary products.
As the great Oliver Blanchard wrote in his book, Macroeconomics, production equals income equals demand. My demand creates income.
How has your demand changed after you've bought a new "product"? As automobiles become safer, do you drive more and demand more gas? As HDTV evolve do you demand better sound systems and more comfortable chairs?
Technology improves our life my making quality changes to a product. Economists often say that quality improvements are not captured in GDP. That might be true, but whatever our standard of living is, I would not want to return to the 70s and adopt that standard of living.