The Third Answer: How Market-Creating Innovation Drives Economic Growth and Development

Innovations: Technology, Governance, Globalization, 12(3-4), Winter-Spring 2019, pp.10-26

17 Pages Posted: 9 Jan 2020

See all articles by Clayton M. Christensen

Clayton M. Christensen

Harvard University - Technology & Operations Management Unit

Efosa Ojomo

Clayton Christensen Institute

Gabrielle Daines Gay

Ensign College of Public Health

Philip E. Auerswald

George Mason University - Schar School of Government and Policy

Date Written: December 28, 2018

Abstract

In this essay, we begin by offering a definition and two examples of market creating innovation that provide a foundation for the historically informed theory that follows. With this definition and the examples in mind, we next assess the two dominant theories of development— essentially, the currently dominant answers to the centuries-old question of why some countries prosper while others do not. We propose that market creating innovation constitutes a "third answer to this question. We then assess how new influences such as Blockchain technology and emerging business models relate to market-creating innovation, institutional evolution, and, ultimately, economic development. We offer specific examples of how Blockchain technology is being deployed to support market-creating innovation. We conclude by considering how a better understanding of the drivers of development prompts us to reconsider the definition of development itself.

Keywords: development, market creating innovation, blockchain, entrepreneurship

JEL Classification: D20, M13, O12, O30, O33

Suggested Citation

Christensen, Clayton M. and Ojomo, Efosa and Gay, Gabrielle Daines and Auerswald, Philip Edgar, The Third Answer: How Market-Creating Innovation Drives Economic Growth and Development (December 28, 2018). Innovations: Technology, Governance, Globalization, 12(3-4), Winter-Spring 2019, pp.10-26 . Available at SSRN: https://ssrn.com/abstract=3509248

Clayton M. Christensen

Harvard University - Technology & Operations Management Unit ( email )

Boston, MA 02163
United States

Efosa Ojomo

Clayton Christensen Institute ( email )

United States

Gabrielle Daines Gay

Ensign College of Public Health ( email )

Ghana

Philip Edgar Auerswald (Contact Author)

George Mason University - Schar School of Government and Policy ( email )

3351 Fairfax Dr.
Arlington, VA 22201
United States

HOME PAGE: http://auerswald.org

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