ECONOMIC AND SOCIAL DIMENSIONS OF INNOVATION
Technological
innovation has become a major driver of economic change. Innovation relies on intangibles,
such as creativity, knowledge and experience. These intangibles are the most
valuable resources of our time, much as raw materials were during the early
times of industrialization.
The traditional
importance of material resources has therefore been supplanted by intangibles
that in many ways support innovation. Those intangibles have become
socioeconomic resources in their own right, taking the privileged role that was
once accorded to raw material resources. Nations and locales that can manage to
nurture, reproduce and expand those resources are bound to become sources of
innovation.
There are three
forces that make innovation important in today’s world. One is the need to
achieve reductions in time, effort and space in most every human activity.
Time, effort and space are often interrelated, and collapsing one of them in
any significant way usually affects the others. Most any innovation that
collapses any of these three factors also reduces costs. The introduction of
e-mail, for example, reduced the time needed to send a letter to almost
nothing, it eliminated the effort associated with processing and carrying the
letter, and it also managed to shrink geographical space by allowing
instantaneous transmission. As a result, the costs associated with sending a
letter were reduced substantially. We might therefore say that the
socioeconomic importance of any innovation is related to how strongly it
collapses time, effort or space.
A second force is
the need to increase the pace of innovation. Globalization and competition have
created more pressure to accelerate the speed of innovation in many economic
activities. Increasing the pace of innovation requires improving the intangible
resources that support innovation. It also requires placing more emphasis on
research and development (R&D), and finding faster ways to introduce
innovations to markets. An example of the efforts being made to increase the
speed of innovation is the division of many research departments into first-
and second-mover research units. First-mover research units are oriented toward
invention and finding discoveries that can be patented. Second-mover research
then seeks to adjust, modify or find uses for the discoveries and inventions
produced by the first-mover units. Another example is the formation of research
alliances between firms in highly innovative activities, such as biotechnology,
to gain access to more knowledge and resources and speed up the pace of
innovation.
The third force
making innovation more important is the need to improve the technological base
of many nations and economic activities. Globalization has made it necessary to
project the innovative capabilities of nations, regions, industries and firms
as never before. More than at any previous time, innovation has become a major
tool in the race to create jobs and increase incomes. As a result, many
nations, regions and locales are trying to find ways to bolster the intangibles
that support innovation. Increasing the quality of technological education and
building the kinds of infrastructure that can directly tie into innovative
activities are examples of some of those efforts (for additional insights on
those aspects, visit www.technocapitalism.com).
The economic and
social dimensions of technological innovation are therefore expanding their
scope and becoming more important. It may not be long before indicators of
innovation come into regular use and become as noticeable as those now
published regularly to provide information on incomes, population or public
health. By providing an indicator of innovative potential, the concept of innovative
capacity can help chart the economic and social dimensions of
technological innovation.
For a discussion
of possible uses of the concept of innovative capacity, see Real World Applications.
For published work on the concept, see Publications.
Copyright © Luis Suarez-Villa. All
rights reserved.