What does it mean "an innovative economy"?
Is your country innovative?
What is necessary to build an innovative economy?
Is it possible in the case of developing countries to be innovative?
Is every developed economy an innovative one?
Innovation economics is an economic doctrine that reformulates the traditional model of economic growth so that knowledge, technology, entrepreneurship, and innovation are positioned at the center of the model rather than seen as independent forces that are largely unaffected by policy.
Innovation economics is based on two fundamental tenets. One is that the central goal of economic policy should be to spur higher productivity and greater innovation. Second, markets relying on price signals alone will not always be as effective as smart public-private partnerships in spurring higher productivity and greater innovation. This is in contrast to the two other conventional economic doctrines, neoclassical economics and Keynesian economics.
In such economics, innovation is central. Innovation economists recognize that innovation and productivity growth take place in the context of institutions. Indeed, it is the “social technologies” of institutions, culture, norms, laws, and networks that are so central to growth, yet are so difficult for conventional economics to model or study. Innovation economists view innovation as an evolutionary process in a market where firms act on imperfect information and where market failures are common.
Source: http://www.ingenesist.com/a-definition-for-innovation-economics/
Thanks a lot dear Dr. Joanna for inviting me to your impressive session, but this economical topic is utterly out of my mechanical engineering research filed, so that makes me unable to present a tough scientific comment. Hope you more and more success.
Accept highest regards,
Emad
Innovation economics is an economic doctrine that reformulates the traditional model of economic growth so that knowledge, technology, entrepreneurship, and innovation are positioned at the center of the model rather than seen as independent forces that are largely unaffected by policy.
Innovation economics is based on two fundamental tenets. One is that the central goal of economic policy should be to spur higher productivity and greater innovation. Second, markets relying on price signals alone will not always be as effective as smart public-private partnerships in spurring higher productivity and greater innovation. This is in contrast to the two other conventional economic doctrines, neoclassical economics and Keynesian economics.
In such economics, innovation is central. Innovation economists recognize that innovation and productivity growth take place in the context of institutions. Indeed, it is the “social technologies” of institutions, culture, norms, laws, and networks that are so central to growth, yet are so difficult for conventional economics to model or study. Innovation economists view innovation as an evolutionary process in a market where firms act on imperfect information and where market failures are common.
Source: http://www.ingenesist.com/a-definition-for-innovation-economics/
Thanks a lot, @ Mahmoud Omid for your explanation and for the link. You indicate the significance of spurring higher productivity and greater innovation and smart public-private partnerships, for sure it is important.
Dear @ Emad Kamil Hussein thanks so much for your comment. But I cannot agree with you. On the contrary, the innovation economy is not just an economic matter. Probably a mechanical engineering research may have a big doze of innovation. And form your cientific contribution put on the RG side I learned a lot on the innovation :) "...MANDATORY INGREDIENTS OF A QUALITY RESEARCH" It is impressive.
Best wishes, Joanna
Hello,
As discussed in some papers, the capability to innovate and to bring innovation successfully to market will be a crucial determinant of the global competitiveness of nations over the coming decade. There is growing awareness among policymakers that innovative activity is the main driver of economic progress and well-being as well as a potential factor in meeting global challenges in domains such as the environment and health.
Thanks,
Dear Joanna Gocłowska-Bolek , it is an interesting question.
Innovation economists believe that what primarily drives economic growth in today’s knowledge-based economy is not capital accumulation, as claimed by neoclassicalists, but innovation. The major changes in the U.S. economy of the last 15 years have occurred not because the economy accumulated more capital to invest in even bigger steel mills or car factories; rather they have occurred because of innovation. The U.S. economy developed a wide array of new technologies, particularly information technologies, and used them widely. Although capital was needed for these technologies, capital was not the driver; nor was capital a commodity in short supply.
The major drivers of economic growth are productive efficiency and adaptive efficiency. If the focus in neoclassical economics is “the study of how societies use scarce resources to produce valuable commodities and distribute them among different people,” the focus in innovation economics is the study of how societies create new forms of production, products, and business models to expand wealth and quality of life.
In contrast to neoclassical economics, which is focused on getting the price signals right to maximize the efficient allocation of scarce resources, innovation economics is focused on spurring economic actors – from the individual, to the organization or firm, and to broader levels, such as industries, cities, and even an entire nation – to be more productive and innovative. From the standpoint of innovation economists, if government policies to encourage innovation “distort” price signals and result in some minor deadweight loss to the economy, so be it, because allocative efficiency is not the major factor in driving economic growth in the 21st century knowledge-based economy.
Spurring evolving and learning institutions is the key to growth. Neoclassical economics, which focuses principally on markets and individuals and firms acting in them as atomistic particles responding pretty much exclusively to price signals along supply and demand curves does explain a share of the economy. But innovation in the neoclassical economic model is an exogenous process – a black box, if you will, that works its magic solely in response to price signals. In this sense, the neoclassical model sees innovation as falling like “manna from heaven,” not something that can be induced by proactive economic policies.
In innovation economics, innovation is central. Innovation economists recognize that innovation and productivity growth take place in the context of institutions. Indeed, it is the “social technologies” of institutions, culture, norms, laws, and networks that are so central to growth, yet are so difficult for conventional economics to model or study. Innovation economists view innovation as an evolutionary process in a market where firms act on imperfect information and where market failures are common.
I do not think that the British government can be called economically innovative as it reconstitutes the same staid policies year after year, avoiding direct involvement within the economy as a matter of pride. The opposition, Labour, want to take the country back 20 or 30 years reconstituting economic policies that when last used were disastrous.
An innovative policy would be to concentrate on wealth production and how it can be achieved, understanding that it can be achieved in a number of ways. This would require government involvement and not the laissez faire model that happens at present.
Spontaneity, decentrality, open markets=best ideas and practices can be applied and tested. 'Der Staat' (the state) is minimized, keeps law and order, organizes basic welfare policy. In an innovative economy, human ingenuity and creativity are rewarded and not the political conformity to the status quo=economic rent.
Governments and creative sectors around the world have become increasingly aware of the importance of an innovative economy as a generator of employment, wealth and cultural communication. I think that Britain has long been seen as a pioneer in developing this agenda, not only as an engine of the economy but also to promote social integration, diversity and development.
Participation , Equity, Growth, Stability and Sustainability are the traits of innovative economy.
I think there are often good ideas and planes, but the difference between short-term eclogy and long-term ecology are underestimated. Both are important. The main problem is that sustainable ecology must be desired and realized by the concerned inhabitants resp. people, which live in existential difficulties and of the other side, exists an upper class without interest to give up the "traditional" system.
Innovation economists believe that what primarily drives economic growth in today’s knowledge-based economy is not capital accumulation, as claimed by neoclassicalists, but innovation. The major changes in the U.S. economy of the last 15 years have occurred not because the economy accumulated more capital to invest in even bigger steel mills or car factories; rather they have occurred because of innovation. The U.S. economy developed a wide array of new technologies, particularly information technologies, and used them widely. Although capital was needed for these technologies, capital was not the driver; nor was capital a commodity in short supply.
In order to educate and support innovative, we should first identify what characterizes them. Some of the characteristics innovative business leaders embody include the following:
1. Being innovative means doing things differently or doing things that have never been done before. An innovator is someone who has embraced this idea and creates environments in which employees are given the tools and resources to challenge the status quo, push boundaries and achieve growth.
2. Innovators are authentic leaders committed to creating dynamic, highly productive and values-based organizations that hire people who are passionate about their work; give them opportunities to grow; make them feel valued and respected; and give them clarity about their roles and responsibilities.
3. Innovators understand innovation never happens in a vacuum. They value, build and sustain active, vibrant networks of people, assets and organizations. Instead of viewing collaboration as a challenge, they see it as an opportunity to identify strengths, weaknesses, opportunities and threats.
4. Innovators are committed to diversity and understand it takes many different points of view to fully grasp the complexity of economic, technological and other challenges.
5. Innovators have let go of the high-control, low-trust model of leadership and lead by directing from the center of their organizations. They empower employees to be creative and develop the skills they need to move to the next level in their careers.
6. Innovators are not taking shortcuts and are not afraid of going after more complex solutions, even if it means taking higher risks.
7. Innovators understand innovation is not a one-time thing and that start-up companies as well as those that are several generations old have to continuously reach above and beyond what they have done before to stay competitive. This requires innovators to be effective change managers who know how to navigate through resistance to their ideas.
8. Innovators are not afraid to break with the norm and push past conventional wisdom that causes people to think in a box. They are aware customers don’t always know what they want.
9. Innovators understand paying too much attention to traditional business metrics can inhibit companies from making breakthroughs. At the same time, however, their business success speaks for itself.
10. Innovators contribute new, unconventional ideas of their own.
Innovation takes place on many levels. The big breakthroughs usually get the attention. But if we want America to maintain its competitive edge in the long run, we need to encourage, support and celebrate innovation on a smaller, much broader scale, as well. It all starts with leadership. So let’s make sure our companies can identify innovative leadership when they see it – and seize it.
For Further reading please follow the link:
https://www.forbes.com/sites/rebeccabagley/2014/01/15/the-10-traits-of-great-innovators/2/#39965524378e
Dear Dr. Joanna
- Innovation in the agriculture sector .
- Innovation in the industry sector .
- Regulation of customs laws .
- The government has to deal with the problem of competing the foreign commodity against the local commodity .
- Government support agriculture and industry .
- Government support for free trade .
Best regards
Dear Dr. Joanna
- Innovation in the agriculture sector .
- Innovation in the industry sector .
- Regulation of customs laws .
- The government has to deal with the problem of competing the foreign commodity against the local commodity .
- Government support agriculture and industry .
- Government support for free trade .
Best regards
The major drivers of economic growth are productive efficiency and adaptive efficiency. If the focus in neoclassical economics is “the study of how societies use scarce resources to produce valuable commodities and distribute them among different people,” the focus in innovation economics is the study of how societies create new forms of production, products, and business models to expand wealth and quality of life.
In contrast to neoclassical economics, which is focused on getting the price signals right to maximize the efficient allocation of scarce resources, innovation economics is focused on spurring economic actors – from the individual, to the organization or firm, and to broader levels, such as industries, cities, and even an entire nation – to be more productive and innovative. From the standpoint of innovation economists, if government policies to encourage innovation “distort” price signals and result in some minor deadweight loss to the economy, so be it, because allocative efficiency is not the major factor in driving economic growth in the 21st century knowledge-based economy.
The freedom to fail and to try again! It also the requires freedom from red tape.
Isem, I wonder why you think that of Britain, purely out of interest? Here we see the economic approach as unchanging and devoid of innovation.
Also, a society that doesn't permit women to have equal rights in business will have an economy that is not optimally efficient, innovative and creative.
Innovative nations have strong research university systems, without which it would be nearly impossible to attract the talent needed to drive innovation. High quality scientific and technical personnel gravitate toward places that have the resources they need to create new inventions and technologies.
https://briworldwide.com/5-characteristics-of-innovative-countries/
The 10 Traits Of Great Innovators
The characteristic of great innovators and great companies is they see a space that others do not. They don't just listen to what people tell them; they actually invent something new, something that you didn't know you needed, but the moment you see it, you say, 'I must have it.'”
These words by Google CEO Eric Schmidt emphasize that innovation is about turning a vision into new products or services. I think ultimately that is true. But I also think there is more to it. I think innovation also is the ability to re-imagine things that already are.
When people are asked about innovative companies, they name the usual suspects: the Googles and Apples and other large players that dominate the FORBES list of the World’s Most Innovative Companies. But there also are lots of much smaller, lesser-known companies in a variety of traditional and emerging industries that are developing or advancing cutting-edge technologies. They often get overlooked because their innovations are not always consumer oriented.
America needs these companies. But do we have enough of them?
The answer is we can never have enough. As we continue to lose our competitive advantages in traditional driver industries like manufacturing, our global economic competitiveness is increasingly dependent on our ability to innovate.
That’s why we must increase our innovation capacity to capture trends, take advantage of emerging technologies, re-energize our manufacturing sector, provide opportunities to the disconnected, and accelerate the pace at which we grow our businesses.
But how do we do that? How do companies innovate? What exactly makes a company innovative?
“Innovation distinguishes between a leader and a follower,” Steve Jobs said.
If we want our companies across the board to be more innovative, we need more innovative leaders; leaders who have the ability to turn new ideas and technologies into assets that will transform their businesses and, by extension, our economy.
In order to educate and support innovative leaders, we should first identify what characterizes them. Some of the characteristics innovative business leaders embody include the following:
1. Being innovative means doing things differently or doing things that have never been done before. An innovator is someone who has embraced this idea and creates environments in which employees are given the tools and resources to challenge the status quo, push boundaries and achieve growth.
2. Innovators are authentic leaders committed to creating dynamic, highly productive and values-based organizations that hire people who are passionate about their work; give them opportunities to grow; make them feel valued and respected; and give them clarity about their roles and responsibilities.
3. Innovators understand innovation never happens in a vacuum. They value, build and sustain active, vibrant networks of people, assets and organizations. Instead of viewing collaboration as a challenge, they see it as an opportunity to identify strengths, weaknesses, opportunities and threats.
4. Innovators are committed to diversity and understand it takes many different points of view to fully grasp the complexity of economic, technological and other challenges.
5. Innovators have let go of the high-control, low-trust model of leadership and lead by directing from the center of their organizations. They empower employees to be creative and develop the skills they need to move to the next level in their careers.
6. Innovators are not taking shortcuts and are not afraid of going after more complex solutions, even if it means taking higher risks.
7. Innovators understand innovation is not a one-time thing and that start-up companies as well as those that are several generations old have to continuously reach above and beyond what they have done before to stay competitive. This requires innovators to be effective change managers who know how to navigate through resistance to their ideas.
8. Innovators are not afraid to break with the norm and push past conventional wisdom that causes people to think in a box. They are aware customers don’t always know what they want.
9. Innovators understand paying too much attention to traditional business metrics can inhibit companies from making breakthroughs. At the same time, however, their business success speaks for itself.
10. Innovators contribute new, unconventional ideas of their own.
Innovation takes place on many levels. The big breakthroughs usually get the attention. But if we want America to maintain its competitive edge in the long run, we need to encourage, support and celebrate innovation on a smaller, much broader scale, as well. It all starts with leadership. So let’s make sure our companies can identify innovative leadership when they see it – and seize it
reference : https://www.forbes.com/sites/rebeccabagley/2014/01/15/the-10-traits-of-great-innovators/#2c3963884bf4
Innovative economy must have a good impact on the people, good education system, create a conducive environment for businesses to strive, provide cheap and regular power supply, muat advance in technology, good health system and discourage corruption.
Innovation is defined as’ The process of translating an idea or invention into a good or service that creates value or for which customers will pay’ Therefore a new concept should bring an ‘economic’ value to be an innovation.
In innovation economics, innovation is the core idea. It should be central of institutions, norms, culture, ethics, education etc. Indeed it is not a short term task, creating a sustainable innovative society needs generations.
Innovative economy is the one that actively and constantly works on creation of favorable environment for knowledge creation, new technology implementation, economic freedom, entrepreneurship culture development and other important things. The way innovative economies are evaluated today is not something I agree with, although it is indicative. Croatia is definitely not an innovative economy, be there is a paradox: there are so many individual innovators who can't get their products to the market efficiently, just because of the unfavorable environment, which we can call national innovation system.
Amir, your point about women is crucial. Once those narrow societies that continue to downgrade and segregate women realise they, the men of course, are harming themselves and everyone's future maybe their societies will join the modern world.
One of the key driver of this growth has definitely been innovation as creativity maximization. It is a practice that has moved from the end of many corporate agendas right to the center of their strategies for leadership and growth. Most industries and sectors are currently experiencing what is called a "Schumpeterian renaissance": innovation in today s world is the main source of competition effectiveness, transformation of society and the economic development.
Growing economic theory emphasizing entrepreneurship and innovation.
Dear Joanna,
you ask many important and interesting questions, I try to answer the first.
In the main references of the economic literature on the subject, such as Schumpeter, we can identify some key elements that characterize an innovative economy (personally I have a certain attention to the work of Schumpeter, which I think can be reasonably considered an important part in the recent rediscovery of IE by modern economists).
The theory rely on the innovation capacity coming from knowledge and on the technological externalities induced by it. This knowledge, in a context of regimes and policies allowing for entrepreneurship and innovation (mainly, R&D investments) generates externalities in the market and affect the socio-economic environment towards continuos innovation. At a very general level, in economic terms, innovation describes the development and application of ideas and technologies that improve goods and services or make their production more efficient. This is a very vague definition, so, to better focus the concept, one can refer to concrete examples. For example, looking to some documents from WEF, you find, among the other, technologies for urban innovation: (digitally) re-programmable space, the waternet (an internet of pipes), networked trees that fight climate change and many other.
Good examples at a national level are numerous, like the massive investment of Germany in R&D resulted in the success of its biotech firms; or the case of China.
Best regards,
Marco
Thank you all for your comments. All these opinions are very important to me! I am working on the subject right now.
Dear , Dr. Joanna Gocłowska-Bolek ..
Good day...
I am in full agreement with Dr. Beemnet answer and I see that his answer is very suitable and meaningful .
Wit my best regards.
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