Blade Runner Economics: Will Innovation Lead the Economic Recovery?
Forthcoming in Research Policy
26 Pages Posted: 29 Jan 2015 Last revised: 27 Apr 2016
Date Written: January 29, 2015
Schumpeterian economics has for long associated phases of economic expansion to the introduction in the economic and social fabric of successful innovations. On the contrary, economic depressions have often been explained as the inability, or the lack of availability, of innovations. Can the economic crisis started in 2008 be explained as an inability to introduce innovations in the economic system? And, conversely, will a new stream of innovation be lead an economic recovery?
These issues are not new: after the economic crisis of the 1970s, it was repeatedly asked which innovations could lead a new development phase. In the early 1980s, contrasting views where discussed at the Science Policy Research Unit of the Sussex University: Christopher Freeman was leading those who believed that only revolutionary changes in the economic structure could lead to a long-term recovery, while Keith Pavitt stressed the importance of accumulated skills and competences to sustain economic life.
These hypotheses were tested against some of the emerging technologies of the period: nuclear energy, bio-technology and ICTs were scrutinised to assess their potential impact in terms of employment generation. After thirty years, it can be said that nuclear energy and bio-technology have not delivered (yet?) their promises, while ICTs have become much more important than expected. In particular, they have managed, as predicted by Freeman, not only to generate a successful new industry, but also to change the operation of all other industries.
These predictions were the result of an explicit model about when and how new technologies can become the driving force of economic and social development. What can does the model tell about the reality of the XXI century?
The paper presents an attempt to identify what could be the driving technologies of the next economic wave on the ground of: 1) Cost reductions in a wide range of products and services; 2) Improvement of the technical characteristics of products and services; 3) Social and political acceptability; 4) Environmental acceptability; 5) Pervasiveness in the overall economic system; 6) Emergence of new companies, often also with a distinctive managerial organization.
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