Cycles, Crises and Innovation

Cycles, Crises and Innovation

Path to Sustainable Development – a Kaleckian-Schumpeterian Synthesis

Jerry Courvisanos

Cycles, crises and innovation are the major economic forces that shape capitalist economies. Using a critical realist political economy approach, the analysis in this fine work is based on the works of Michał Kalecki and Joseph Schumpeter – both of whom identify these three dynamic forces as plotting the path of economic development. Jerry Courvisanos’ thought-provoking book examines how the rise of capital through investment enshrines innovation in profit and power which in turn determines the course of cycles and crises. The author concludes by arguing for strategic intervention by transformative eco-innovation as a public policy path to ecologically sustainable development.

Chapter 8: Regional Development in Sustainable Eco-innovation

Jerry Courvisanos

Subjects: economics and finance, economic psychology, economics of innovation, history of economic thought, innovation and technology, economics of innovation


The social goals of reducing unemployment and enabling ecologically sustainable development are more likely to be achieved if the spatial dimensions of economic policy are made explicit. (Stilwell and Primrose, 2010, p.5) Introduction The previous chapter explicated the Lowe-Kalecki eco-sustainable framework for transformative eco-innovation towards sustainable development. The instrumental approach to this framework enables the attainment of sustainable development through implementation of a perspective plan. This furnishes an interactive private and public investment strategy to establish physical and social infrastructure based around motivation and voluntary conformity with ecologically appropriate goals. The chapter’s opening quotation brings forth the need for a spatial or regional dimension, both in terms of input into the perspective innovation strategy and also in undertaking the eco-innovation and investment necessary. The roles of both sub-national regional State governance and entrepreneurial innovation need to be revealed in the context of regional development for sustainable eco-innovation. The ‘regional innovation systems’ research paradigm is the explanatory approach which applies a dynamic holistic analysis to a complex array of processes, both private and public, in sub-national regions that determine the knowledge base and decision-making that shapes innovation (Cooke et al., 1997). From a critical realist perspective, this Schumpeterianinspired ‘systems’ approach is useful since it focuses on institutions and their relationship to each other which cannot be exposed through the static neoclassical market tools.1 However, as Figure 3.1 attests, ‘innovation systems’ only provide the milieu for the Kaleckian profit-based reproduction system of innovation and investment encompassing capitalist power and the mutable crisesprone...

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