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Innovation and Employment

Process versus Product Innovation

Charles Edquist, Leif Hommen and Maureen McKelvey

Which kinds of growth lead to increased employment and which do not? This is one of the questions that this important volume attempts to answer. The book explores the complex relationships between innovation, growth and employment that are vital for both research into, and policy for, the creation of jobs.
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Chapter 7: Implications for Public Policy and Firm Strategy

Charles Edquist, Leif Hommen and Maureen McKelvey


In this chapter we develop implications for public policies and also for the strategies of firms, based on the theoretical perspective, arguments and empirical evidence presented in earlier chapters of this book. The idea of innovation policy is introduced in section 7.1. Section 7.2 goes on to consider the reasons for public policy intervention. Subsequently, sections 7.3 and 7.4 discuss, respectively, the need for selectivity in innovation policy and both general and specific policy implications of the systems of innovation approach. A specific focus on innovation policy for employment creation is developed in section 7.5. Section 7.6 presents some of the main policy alternatives or options that have been suggested by theoretical and empirical work on the economics of innovation. Finally, section 7.7 deals briefly with implications for the management of innovation in firms. 7.1 INTRODUCTION Both governments and firms are important actors that can at times influence the direction and rate of future innovations. The systems of innovation (SI) approach emphasizes that the creation and diffusion of new knowledge of economic value, that is, innovations, is a process which involves more than individual firms or other organizations. This implies that government can have a role in stimulating change beyond creating the institutions that allow the market to function. At the same time, the SI approach assumes that firms are the main actors that develop and implement innovations. Accordingly, this chapter addresses both public policy and, to a lesser extent, the strategies of firms. Innovation policy is public action that...

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