Cycles, Crises and Innovation
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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.
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Chapter 6: Political Aspects of Innovation and Eco-sustainability

Jerry Courvisanos


The necessity that ‘something must be done in the slump’ is agreed; but the fight continues, firstly, as to what should be done in the slump (i.e. what should be the direction of government intervention). (Kalecki (1943) 1990, p.353) Innovation as public policy At the beginning of Chapter 2, innovation in the twenty-first century was identified with all that is creative and progressive, becoming the quintessential feature of business and economic development. However, the corollary to ‘good’ innovation is the ‘bad’ of income inequality and the ‘ugly’ of predatory accumulation of wealth. As a result, the advocacy of public innovation policy has crossed over from being one aspect of industrial policy in the mid-twentieth century – through patent rights, government procurement and research and development (R&D) support (Scherer, 1970, pp.122–5); to reach distinguished status as a top national priority in the early twenty-first century – requiring holistic systems review of a country’s innovation policy and performance (OECD, 2005b). First, a systematic review of all member OECD countries’ innovation policies was initiated along with surveys and ‘barometers’. Then appeared a plethora of government initiatives – national independent reviews (e.g. Cutler Innovation Review in Australia), policy discussion ‘green papers’ (e.g. Growth and Innovation Framework in New Zealand) and policy document ‘white papers’ (e.g. Science Budget and Innovation Letter in the Netherlands). Given this recent strong political focus on public innovation policy as an economic strategy, there needs to be a framework to conduct empirical research and also to design appropriate innovation policies. A...

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