Innovation at the heart of economic growth
Tuesday, August 19th, 2008
With dark clouds hovering across the skies of economies all across the western world the search for new ways to generate economic growth is on. In many cases the solutions have been looked for in tax cuts and infrastructural improvements, but in the probably the most hard hit country in western world, the U.S., a question about the whether innovation could be at the heart of economic growth has been rased.
Rob Atkinson, the president of the Information Technology & Innovation Foundation is certain that the way for turbocharged growth is in “innovation economics”. “Innovation is what is driving growth, and there a policies one could employ to support innovation” Atkinson says. According to Atkinson the US should use tax incentives and spending on R&D, patent generation and increase the number of science and engineering graduates. There is also data to support these claims, from 1980 to 2001, all net growth in the U.S. came from firms 5 years old or less, while older companies actually lost jobs.
Lower taxes, new infrastructure and balancing the budget might be a way to wrestle the beast of trade depression, but according to Atkinson you would have go all twelve rounds instead of going for a KO in the first. To upgrade living standards government must support technological innovation. For example, government spending led to the invention of the internet, says Atkinson.
“The way you drive innovation is when the public and private sectors work together,” he said. “An R&D tax credit does distort the economy, but the growth vastly outweighs the costs.”
Why this matters in Finland is because the future of our economy is no longer local, but global and at the heart of Finland’s keys to success today and in the future is in R&D and innovation done in the 23 science parks in Finland, the largest being Otaniemi.
The formation on the Aalto University is a clear step toward an approach to create a platform for future innovation. A collision of future technology engineers, designers and economist could be the hotspot for interdisciplinary collaboration and innovation. With world class research in nanotechnology, wireless technologies and mobile technology among others, Finland has the opportunity to be an “innovation economy” and generate new growth in the economy with a star trekkian approach to boldly go where no man has gone before.
Pekka Front, Otaniemi Marketing
(Source: statesman.com: Innovation is key to economic growth, analyst argues by Marilyn Geewax)