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 7: Innovation and Investment Policy for Sustainable Development

Jerry Courvisanos


Where there is no vision, the people perish… (Proverbs 29:18, King James Bible) Introduction to innovation and sustainable development This chapter develops a broad national-based innovation and investment policy framework for sustainable development (or simply ‘eco-sustainable framework’) that can be applied to any market-based economy across all varieties of capitalism. The aim is to provide guidelines for setting up an innovation system and an investment climate that have appropriate political economy institutions and structures, as well as strategic planning tools, for inducing transformation to an eco-innovation technological and social paradigm. Van Berkel (2007a, p.527) defines ‘eco-innovation’ as ‘… environmentinformed and -driven improvements and innovations in products, services and processes that deliver more value to producers and/or consumers while progressively reducing net environmental impacts’. Thus, an eco-innovation paradigm is inherently sustained by diminishing anthropogenic ecological damage. The aim of this eco-sustainable framework is to usher in the creative destructive force of innovation that results in a techno-economic paradigm shift towards ‘… the next [sixth] wave of innovation [that] will be driven by resource efficiency, enabled through the pricing of waste and natural resources, and turbo-charged by clean technologies’ (Moody and Nogrady, 2010, p.170). Greenwood and Holt (2010) persuasively show this shift to sustainability with a high quality of life has eluded this planet; instead, there is mounting evidence of rising inequality, growing public squalor and loss of biodiversity. Such systemic failures that create crises provide the major political and technical impetus to the adoption of this type of framework. The innovation and...

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