In your opinion what is the role of innovation in economic growth?

Innovate or stagnate.

If your vision can't allow for quick, actionable innovative ways to grow the future isn't too welcome. Innovation in economic growth is crucial since archaic business models are proving to be less important in the age of information overload. Innovation allows you to analyse data in multiple new ways to provide a much more sound solution for growth of cities, and countries.

nnovation is important at all stages of development; specifically, the creation and diffusion of technologies are important for economic growth and welfare across all economies. Different types of innovation play a role at various stages (e.g. in earlier stages, incremental innovation is often associated with the adoption of foreign technology). Opportunities for successful innovation experiments and a potentially different framework for development are emerging. Notably, these opportunities result from the rise of information and communication technologies, the development of global value chains, the increased importance of some emerging countries in the global innovation system, the growth of service-based economies and a greater openness to trade and foreign direct investment. Today a key challenge for innovation policy in emerging countries is to encourage inclusive growth and support research addressing major social challenges.

 

Innovation is relevant for all countries at different stages of development Innovation is important at all stages of development; specifically the creation and diffusion of technologies are important for economic growth and welfare across all economies.   In spite of its demonstrated benefits for meeting the immediate and long-term developmental goals of emerging and developing countries, the relevance of innovation for these countries is sometimes questioned. Such thinking is often based on a fairly restricted understanding of innovation as “high technology.” It...Expand » Types of innovation for development Different types of innovation can play different roles at various stages of development. In earlier stages, incremental innovation is often associated with the adoption of foreign technology, and social innovation can improve the effectiveness of business and public services. High-technology, R&D-based innovation matters more at later stages of development and for the most part, in advanced businesses in developing economies, when it is both a factor of competitiveness and of learning (...Expand » A new innovation landscape offers opportunities and challenges Several emerging economies, particularly China, have become significant actors in the global innovation system. There is evidence that R&D played a key role in the takeoff of Asian economies such as China, India and Korea (Ang and Madsen, 2011). What is more, many emerging economies have industries or firms that are at the technology frontier and need to innovate to compete. In the EU R&D Scoreboard, which lists the world’s top 1400 R&D-investing companies, more than 100 were from emerging and developing economies in 2011. Others were from Malaysia, the Russian Federation, Singapore, South Africa and Thailand (EC, 2011). Table 2 lists the top 15 firms from emerging economies based on their R&D investment.   Table 2. Top 15 firms from emerging economies in terms of R&D investment, 2011 Source: EC (2011), “Monitoring industrial research: the 2011 EU Industrial R&D investment Scoreboard”, European Commission, Luxembourg. StatLink:  http://dx.doi.org/10.1787/888932691137 Innovation can help address the challenge of inequalities in emerging countries While innovation and growth are central for addressing social challenges, improving economic performance and creating jobs, the impacts are not necessarily “socially” inclusive, because they can increase inequalities in income and opportunities of different groups in society. A majority of the world’s poor now live in middle-income countries where the inequalities in income and opportunities are strikingly skewed. The realities in many emerging and developing countries are such that a small fraction of the population has access to wider resources and opportunities while a larger group lacks access to the most basic resources. At the top of many government agendas is the objective of socially inclusive development, because high levels of inequalities can negatively affect growth.   Innovation dynamics and policies have impacts on “industrial inclusiveness”, which is the extent to which firms differ in their innovation and productivity performance. Many emerging and developing economies have economic structures characterised by “islands of excellence”—very innovative, world-leading businesses, sectors, research institutions or universities—which coexist with a group of weak performing firms or institutions and a substantial informal economy. Industrial inclusiveness has potentially important impacts on social inclusiveness. In addition, “territorial inclusiveness”—the geographic dimensions of industrial and social inequalities—is an important facet of those inequalities.   Well-designed “place-based” policies seek to build on the opportunities for development based on the economic and social realities in different locations of a country, be it a capital city or a remote rural area, by ensuring the needed public goods and services are available to people and firms (OECD, 2013).   Thus, inclusive development is essential for innovation policy agendas in emerging countries, along with research aimed at addressing social challenges. Many examples show that innovative products, particularly in the areas of food, health and basic livelihood, can contribute substantially to improving the welfare of lower-income groups. Both private for-profit actors and not-for-profit actors have supported initiatives, with financial and other forms of aid. To serve lower-income markets, demand-side characteristics beyond high sensitivity to price, have to be addressed. Such demand-side characteristics are the need to adjust products to specific user contexts, such as lack of access to electricity, and the challenge of providing information about product purpose and use, reflecting the low human capital of most low-income groups. Entrepreneurs have used innovative pricing and financing strategies and business process innovations to serve lower-income markets profitably (OECD, 2013).