A Critical View of Innovation in the Context of Poverty, Unemployment and Slow Economic Growth

Roberto Kozulj - Fundación Bariloche

doi:10.4236/me.2011.23028

Abstract

For the last two decades the study of technical innovation systems has been a regular practice. It has thus become a specific field in which different approaches are constantly emerging. Its importance derives not only from the needs of the productive sector in its search for new markets and opportunities, but also from the fact that the formulation of public policies that will foster growth, employment and income depends on its comprehension. In spite of the efforts made to understand innovation systems as socio-technical systems, emphasis was laid on how to create new market opportunities and improve competitiveness, disregarding a proper understanding of the global dynamics of growth. This was pushed into the background by the belief that only good microeconomic results will lead to good macroeconomic ones. Thus, the complex and eVolutionary perspective of the relationship between urbanization, growth, technological change and macroeconomic structural changes has been ignored. This paper attempts to further explore and analyse this topic by dealing with a series of issues: firstly, the effects of the decline in urban population growth on the use of productive capacity in several important sectors; secondly, structural changes in product composition caused by the saturation of urbanization processes and its effect on the behavior of productive units, and finally, the effects of shorter lifecycles of products on income distribution. The whole perspective is useful to outline the global context in which socio-technical systems develop and the challenges faced when testing their capacity to provide solutions for labor and poverty-related problems.

Highlights

The links between economic growth, technological innovation and better human welfare are among the main topics in economic literature
Some interpretations of the new spatial balance of global economic growth due to the role played by emerging economies – which could compensate the slowing pace of activity in the US and Japan, both of which should remain well contained―are based on a simplistic interpretation of innovation as the driver of growth and of the role of China and India [1,17]
These interpretations affect empirical results regarding the debates on growth, convergence and equality, and overlook the identification of probably more robust factors that could explain both the diversity of drivers of growth, such as this new spatial balance of the world product, and important links between technological innovation, shorter product life cycles, urbanization and income distribution considered from an evolutionary perspective of a wider explanatory scope

Summary

Introduction

The links between economic growth, technological innovation and better human welfare are among the main topics in economic literature. Some interpretations of the new spatial balance of global economic growth due to the role played by emerging economies – which could compensate the slowing pace of activity in the US and Japan, both of which should remain well contained―are based on a simplistic interpretation of innovation as the driver of growth and of the role of China and India (which could boost world economy to its highest level ever since the first wave of growth after the second Industrial Revolution) [1,17] These interpretations affect empirical results regarding the debates on growth, convergence and equality, and overlook the identification of probably more robust factors that could explain both the diversity of drivers of growth, such as this new spatial balance of the world product, and important links between technological innovation, shorter product life cycles, urbanization and income distribution considered from an evolutionary perspective of a wider explanatory scope. Neither the negative role of “innovation” on the possibilities of better income distribution, nor the importance of innovation as a natural result of market saturation have ever been considered seriously enough

What do the Data Show about Economic Growth?

Findings

Conclusions