National Innovation, Indicators and Policy

National Innovation, Indicators and Policy

New Horizons in the Economics of Innovation series

Edited by Louise Earl and Fred Gault

This book takes stock of what is known about the process of innovation and its effects, and the policy interventions that influence both. It provides insights into future research required to support evidence-based policy-making and makes clear the need to take a systems approach to the analysis of innovation, its outcomes and its impacts.

Chapter 10: Knowledge, Policy and Innovation

Luc Soete

Subjects: economics and finance, economics of innovation, international economics, innovation and technology, economics of innovation, innovation policy


Luc Soete INTRODUCTION Innovation, as discussed in this book, is about creating value from ideas. For the value to be created, the ideas must connect to the market through new goods or services, or through better ways of designing, producing and delivering products to the market. The ultimate key to all of this is knowledge. This chapter takes a somewhat historical approach to the emergence of this kind of knowledge-driven society and the crucial role therein of innovation. In this sense the knowledge society is a logical progression from the agrarian society, the industrial society and the information society. It is made possible by the information and communication technology (ICT) networks which support the flow of codified knowledge locally and globally. The term ‘knowledge society’, here, refers principally to the fact that in a globally connected world, knowledge is the raw material for production, it is embedded in the means of production, and the consumer needs knowledge to use what is produced. The next section examines the old, traditional view on the role of science and technology in the industrialized economy. The development of internationally comparable statistics on industrial research and development was a major statistical innovation which was instrumental in the recognition of the importance of science and technology for economic growth, industrial adjustment and international competitiveness. It was one of the major contributions to the economics of industrial innovation of Chris Freeman’s early work. In his own characteristic voluntary fashion he almost single-handedly succeeded in laying the...

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