Commentary: What is Innovation Economics?

Abstract:     
Our interest in writing this article is to create a bridge between the scholarly and academic research on technological innovation and a private sector, for-profit business model that implements the ideas on innovation and entrepreneurship, primarily in metro regional economies.

In this column, the organization discusses the definition of innovation economics with the goal tohighlight its significance and impact, and to reduce its muddling with inventiveness and technology development. The authors' reference the topic of innovation economics covered in a Business Week article, published earlier this fall.

In the Sept. 22, 2008, edition of Business Week, Dr. Michael Mandel, chief economist of the publication, provided his definition of "innovation economics" and described why he thought it was important to America's economic future.

In his article "Can America Invent Its Way Back?" he wrote about how" smart ideas can turn into jobs and growth" and keep the U.S. competitive.

No, America cannot invent its way back. Why? Because invention is about smart ideas and "brainiacs," about innovation, a market event with buyers and sellers. Brilliance and gadgets may flourish, but if they cannot be sold in some form, they are not innovations. Jumbling innovation, a process that produces market value, and invention, a process that generates newand unique ideas, makes a mess of the job of pointing the way for the United States to be more competitive in the global innovation economy. Combining them, making them two faces of the same coin,obscures the features, significance and impact of the innovation economy, one that is dramatically different from the old economy. As Yogi Berra said, "you can see a lot by looking."

So now let's get a clearer view of what innovation is and what it is not, how the innovation economy works, and look at some of the thinking that we need to correct before setting out to build policy for our next presidential administration.

Number of Pages in PDF File: 5

Keywords: Innovation econmics, invention

JEL Classification: L16, M13, O16, O31, O32, O33, O34, O38, R58

Accepted Paper Series