Innovation Strategies for a Global Economy

Innovation Strategies for a Global Economy

Development, Implementation, Measurement and Management

Fred Gault

This book is about innovation strategies for a global economy, their development, implementation, measurement and management. Following the global economic crisis, people are asking: what went wrong? Here, Fred Gault illustrates that a part of the problem was innovation in financial services, which resulted in the release of attractive new products to the market that diffused rapidly and then lost value. This book considers innovation and how policies are developed and implemented to support it. In so doing, framework conditions such as market regulation and the cost of doing business are examined to discover how future problems could be avoided.

Chapter 2: A Systems Approach

Fred Gault

Subjects: innovation and technology, innovation policy


INTRODUCTION Chapter 1 raised issues that motivate the need for a better understanding of innovation, of innovation policy and of the use of statistical indicators in support of these activities. The challenge is dealing with, if not understanding, a global, complex, dynamic and non-linear system. This chapter lays out a systems approach to this with two objectives. The first is to provide a means of classifying the phenomena that are driving the issues discussed in the text. The second is to provide a basis for discussing dynamics and the importance of modelling the systems as a step towards understanding dynamics, and using this understanding to encourage policy learning through scenario analysis. A systems approach to economic and social systems has been part of the economic literature for a long time. Herbert Simon (1996) and Jay Forrester (1971) applied systems theory and dynamic analysis to many problems and shaped the thinking of generations of graduate students. Forrester used a dynamic systems model to support the work of the Club of Rome project, Limits to Growth (Meadows et al. 2004), which gave rise to subsequent systems analysis and policy debate. As models evolved, and more data were required to populate the variables in the models, attention was given to imposing physical constraints on the models so that they could not produce scenarios that required the consumption of more natural or human resources than were physically available. This was the subject of a UN Statistical Office project (Ayres 1978) and projects elsewhere (Gault...

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