Stiglitz on innovation

It is quite rare that an economist understands innovation. Schumpeter was an exception, but it seems there is once again an economist who contributes to our understanding of innovation. Nobody less than Joseph E. Stiglitz wrote about the added value of innovation. It is to believed that innovation is a goal in it self, but why? What is the added value of innovation to our life, our income, to productivity? Stiglitz researches the added value of innovation to our life, well being and income:

 "NEW YORK – Around the world, there is enormous enthusiasm for the type of technological innovation symbolized by Silicon Valley. In this view, America’s ingenuity represents its true comparative advantage, which others strive to imitate. But there is a puzzle: it is difficult to detect the benefits of this innovation in GDP statistics.

What is happening today is analogous to developments a few decades ago, early in the era of personal computers. In 1987, economist Robert Solow – awarded the Nobel Prize for his pioneering work on growth – lamented that “You can see the computer age everywhere but in the productivity statistics.” There are several possible explanations for this.

Perhaps GDP does not really capture the improvements in living standards that computer-age innovation is engendering. Or perhaps this innovation is less significant than its enthusiasts believe. As it turns out, there is some truth in both perspectives."

Read more here"

10 Future technologies that could kill us all

Can America Afford Innovation?

In USA the discussion on the disappearance of the middle class is ongoing, but also in Europe and other developed nations many people looking forward to the impact of new technologies warn about this possible trend of disappearance of middle-income jobs. In an article in Slate, Matthew Yglesias analysis the feed-back that would have to innovation. How can you continue to innovate if there are only low-paid and very high paid jobs? Who will do the research/development/innovation? Read the article here

How to be Silicon Valley?

An old blog-post, but still relevant. Angel investor Paul Graham wrote 7 years ago about what to do to become like Silicon Valley. He summarizes you need rich people and nerds. And to have nerds, you need a strong university system, urban density and a cool factor through a strong cultural life (resembles Richard Florida's 3Ts somehow). His full length blog can be found here Some more interesting quotes from the blog: "Bureaucrats by their nature are the exact opposite sort of people from startup investors. The idea of them making startup investments is comic. It would be like mathematicians running Vogue-- or perhaps more accurately, Vogue editors running a math journal." "An article about Sophia Antipolis bragged that companies there included Cisco, Compaq, IBM, NCR, and Nortel. Don't the French realize these aren't startups?" "If you go to see Silicon Valley, what you'll see are buildings. But it's the people that make it Silicon Valley, not the buildings. I read occasionally about attempts to set up "technology parks" in other places, as if the active ingredient of Silicon Valley were the office space."

State of innovation: Busting the private-sector myth

Images of tech entrepreneurs such as Mark Zuckerberg and Steve Jobs are continually thrown at us by politicians, economists and the media. The message is that innovation is best left in the hands of these individuals and the wider private sector, and that the state – bureaucratic and sluggish – should keep out. A telling 2012 article in The Economist claimed that, to be innovative, governments must "stick to the basics" such as spending on infrastructure, education and skills, leaving the rest to the revolutionary garage tinkerers. Yet it is ideology, not evidence, that fuels this image. A quick look at the pioneering technologies of the past century points to the state, not the private sector, as the most decisive player in the game. Read the remaining of the article by Mariana Mazzucato at New Scientists here: See also her talk at TEDx Sussex University