Getting Innovation Right: The Key to Happiness and Flourishing?

David E Hojman

doi:10.1007/s41412-016-0016-1

Abstract

Correlations between happiness and other variables, including innovation, are possibly dubious and may be ultimately misleading. Quality-of-life enhancing innovation is a social phenomenon, and much more than just a technological breakthrough. It typically involves institutional, cultural, organizational, managerial and other changes. It is the social phenomenon, rather than the technological breakthrough, or in addition to it, which makes the economy more dynamic and lives richer. Interesting examples include the distinction between the invention of the airplane and the development of mass tourism between northern and southern Europe. But there are many other examples, from access to pharmaceuticals in poor countries to wine making, miners' rescue and earthquake damage prevention. Failure to see the difference between the technological breakthrough and the social phenomenon may lead to the wrong conclusions.

Highlights

Correlations between happiness and other variables, including innovation, are possibly dubious and may be misleading
I will not discuss here Phelps’ assessment of living and working conditions during England’s Industrial Revolution, which he proposed in an earlier book and has been examined before (Mokyr 2014; Henrekson 2014), or analyse the arguments in one of his sources, Liberty’s dawn by Emma Griffin
Is there a statistical correlation between innovation and variables such as happiness, labour force participation, or the labour share of income? Phelps interprets the results of a recent survey of household attitudes, including happiness, as reflecting ‘bleak levels of both unemployment and job satisfaction in Europe’. He claims that ‘... many Europeans seem not to have grasped that ... they are poor in the conditions for the good life

Summary

Is There a Correlation Between Innovation and Happiness?

In Phelps’ view, all of the above contribute to innovation and dynamism, and to the ‘good life’, prospering, flourishing and happiness In this comment I focus on the definition of innovation Phelps uses, which I believe is somewhat narrow and restrictive, and possibly misleading. The happiness scores Phelps mentions include 54 for Spain, against higher scores in six Latin American countries, ranging from Chile (58) to Mexico (79), and including Colombia (64), Argentina (66), Brazil (73) and Venezuela (74). Using these materials may lead to the wrong conclusions, for several reasons. Technological breakthroughs and nontechnological innovations have combined to make these peoples’ lives not ‘pitiful’ (Phelps’ word), but joyful

Holidays and Pharmaceuticals

Conclusions