The Innovation Imperative

The Innovation Imperative

National Innovation Strategies in the Global Economy

Edited by Göran Marklund, Nicholas S. Vonortas and Charles W. Wessner

As a result of globalization, strategies for investments in innovation capabilities have gained considerably in importance for businesses, research institutions and policymakers. Public policy has to provide conditions for investments in R & D and innovation that are internationally attractive and effective in stimulating innovation, economic growth and job-creation. This book focuses on the changing roles and challenges of innovation and growth policy, and the strategies and measures that are critical in a globalizing world. It provides guidance for innovation policy strategy formulations and design of innovation policy measures.

Chapter 5: From Knowledge to Innovation: Resolving the ‘European Paradox’ David B. Audretsch

David B. Audretsch

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


5.1 INTRODUCTION1 A quiet and virtually unnoticed revolution is transforming public policy for economic growth, international competitiveness and employment generation. Where policy to ensure economic growth and job creation once looked to fiscal and monetary stimulation, on the one hand, and the large corporation, on the other, a new approach has emerged focusing on entrepreneurship. What was once anathema to economic efficiency and prosperity in the post-war era – new and small firms – has apparently become the engine of economic growth and job creation, not just in one economy, but spanning a broad spectrum of national, regional and local contexts. Following the decade of Europe’s worst economic performance since World War II, including record unemployment, it was perhaps not surprising when a bold new strategy to spur economic growth was unveiled. However, the focus of this new European growth policy would have seemed unimaginable only a few years earlier. With the 2000 Lisbon Proclamation, Romano Prodi, the then President of the European Commission (EC) committed Europe to becoming the entrepreneurship leader of the world by 2020 in order to ensure prosperity and a high standard of living throughout the continent. Romano Prodi and the European Union (EU) were not alone in turning to entrepreneurship to provide the engine of economic growth. The entrepreneurial policy mandate mirrored similar efforts throughout the developed world. Public policy spanning a broad spectrum of national, regional and local contexts was turning to entrepreneurship to replace old jobs which were being lost to outsourcing and...

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