Policy-Wise when Exactly are we Going to act on the Evidence that a Socioeconomy that Functions as an Innovation Ecosystem Pareto Dominates a Competing Socioeconomy that Functions as an Output Ecosystem?

Abstract

Suppose a socioeconomy made up of rational agents engages with effort for deciphering whether it is best governed by either the parameters of the activities of innovation (the parameters of an innovation ecosystem) or the parameters of the activities of output (the parameters of an output ecosystem), as such simulates a fair horse race between the two competing ideologies - note it is governance, that is, management ideology that is modeled, not an exclusion of either activity. Suppose the innovation ecosystem values activities that result in cost efficiencies exactly the same as alternate activities that result in either new products or new product features (the implementational nasc). Under the implementational nasc, the structure of the innovation ecosystem Pareto dominates the structure of the output ecosystem; as such, the terms, output ecosystem or innovation ecosystem are non-vacuous. The innovation ecosystem Pareto dominates the output ecosystem, because it delivers faster economic growth at a lower realization of systemic risk. Relatedly, whereas inflation is the sole macroeconomic parameter that governs the output ecosystem - because it is the sole source of intertemporal changes to agents' (dis)utility - it is only one of six macroeconomic parameters that feasibly govern the innovation ecosystem. However, with the implementational nasc in tow, inflation is either the same or lower in the innovation ecosystem; relative, as such, to the output ecosystem, inflation is irrelevant to agents' welfare, such that it is solely the activities of innovation that span the evolution of agents' utility. In presence of the insight, inflation targeting is inimical to the intertemporal progression of a socioeconomy that seeks to function as an innovation ecosystem. Importantly, there is arrival at a new and improved parameterization of an innovation ecosystem, namely that "an innovation ecosystem is an ecosystem in which each and every agent is incentivized to and has access to work domiciles (e.g. firms, institutions, etc.) in which utility are derived from efforts that, simultaneously facilitate improvements to agents' innovation parameters; increase or refine the aggregate stock of the respective work domiciles awareness; and rather probabilistically, facilitate improvements to the performance of the work domiciles, all in the context of Learning Whilst Doing; the equal importance of cost efficiencies, new products, or new product features; and concerted efforts for the generation of the sorts of connectedness' between work domiciles that are required of a Society-wide Innovation Ecosystem.

Keywords: Economic Growth and Development, Learning Whilst Doing, Awareness, Beliefs, Forecasts, Research & Development

JEL Classification: O31, O38, O40, D51