A Global Transition from Poverty to Prosperity?
Chapter 9: Innovation as a Prime Mover
9. Innovation as a prime mover The invention . . . of technologies that facilitate or encourage non-zero-sum interaction – is a reliable feature of cultural evolution everywhere. New technologies create new chances for positive sums, and people manoeuvre to seize those sums, and social structure changes as a result. (Wright 2000: 22) This chapter develops a number of important arguments: first, innovation is at the core of modern economic development and technical change at the core of innovation, although for followers imitation is critical; secondly, innovation is linked in a complex manner with the growth of knowledge; thirdly, the rate of innovation is more important than its factor-saving bias; fourthly, that innovation is usually embodied in investment; fifthly, while innovation and the associated investment are jointly determined by the demand and the cost sides of economic activity, the rate of innovation is a function of the size and growth of the market – demand is the active element, cost constraints a passive element; sixthly, that the same opportunity can be viewed differently depending on the risk tolerance of the key decision makers – some societies are more sanguine about positive outcomes arising from innovation than others; and finally, that imitation is subject to a series of powerful constraints so that best-practice technology is not freely available to all. There are four sections in this chapter. The first section discusses the issues raised by the role of technical knowledge in economic development, particularly the role of innovation and the difference between innovation and imitation. It explores...
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