Searching for Signs of Technological Innovation in the Ruins of the American Economy
The Private Capital Market Working Paper No. 2008-03-04
8 Pages Posted: 21 Sep 2008
Date Written: August 4, 2008
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.
This paper explores how the concept of the S curve of technology could be used to offer a judgment on the collapse of the American economy. The dilemma in writing this article now is that it may be too soon to offer a definitive economic assessment of the economic collapse.
Even with the help of the S curve, it may be too soon to write the economic analysis of what went terribly wrong for America's experience in the free trade global economy.
The S curve can tell us that it takes about 15 years for an innovation to run a cycle, and the American economy is now in about the 5th year of a 15 year downward spiral.
Unlike past economic depressions, this downward cycle represents an irreversible ratchet down. Like the disease which destroy a brain's neurons, the downward innovation ratchet is irreversible because the innovation capacity of the nation is being destroyed. As LMP conclude, "the current pattern of offshoring activities by American companies that emerge from the ORN study does not fit the traditional story of companies simply trading non core low level workers in the US with low cost labor offshore."
Keywords: S Curve of innovation, economic collapse, capital markets, Industrial value chains, innovation, technology investments
JEL Classification: L16, M13, O16, O31, O32, O33, O38, R15, R58
Suggested Citation: Suggested Citation