Organizational Innovations and Economic Growth

Organizational Innovations and Economic Growth

Organosis and Growth of Firms, Sectors and Countries

Elias Sanidas

Analysing the USA and Japan from the late 19th century to the present day, the book provides an accessible synthesis of economics, management and econometrics to calculate the impact of various organizational innovations on economic growth. The author concludes that organizational innovations make essential contributions to sustained economic growth and that this should be reflected in economic policy both at the firm and the national level.

Chapter 3: The Role of OIs in the Theory of Economic Growth

Elias Sanidas

Subjects: business and management, organisational innovation, organisational behaviour, innovation and technology, organisational innovation


3.1 INTRODUCTION In Chapter 2, a historical review of the economies of the USA and Japan revealed the nature and the importance of various OIs. The first question to answer subsequent to this review is how OIs fit into the preoccupations of economists and other scholars and, consequently, how OIs fit into the process of economic growth. In this study, the latter is defined as changes in the rate of either real output, or productivity (total factor or labour productivity1). When necessary, reference will be made to the growth in employment or other related variables, although it is not a primary concern in this study how these variables (including employment) are related to economic growth.2 In this chapter the foundations for the inclusion of the impact of OIs on the process of industrial growth are laid. Although economic growth is not the same as economic growth in general (the latter includes growth of the services, agriculture and mining sectors), most of the analysis carried out in this chapter is related to economic growth (whereas industrial growth will be more explicitly dealt with in Chapter 4). In this chapter, some ‘hidden’ mechanisms of economic growth and development are explored. In brief, there are some scholars who, for example, have expressed the need to consider or emphasize the impact of OIs per se; this is reviewed in the second section together with some other relevant economic concepts. The third section examines the relationship between OIs and TIs in terms of whether...

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