Innovation and Knowledge-Based Economics

This is the current rage in economic development. Some would call it the paradigm (whatever that may be). The more cynical among us label it the politically correct approach to revitalize your community and save Western Civilization. If ever there were an economic development strategy whose proponents are true believers on the path to salvation, Innovation and knowledge-based economics is it.

Innovation economics is an offshoot of neo-Keynesian economics and the knowledge-based Economy, while certainly interrelated with innovation economics, has a longer history and can usefully be thought of as a derivative of the old Third Wave, Post Industrial Revolution Era. There is an extensive,  frequently obtuse and highly mathematical/modeling literature associated with this approach and this literature certainly could use a skeptical, in reasonably readable English, critique. Since everybody in economic development must follow this strategy, it might be helpful if we all just take a minute (actually about fifteen) and get better acquainted about the theory which underlies such concepts as entrepreneurism, innovation, creativity and many, many others.

The Curmudgeon does not reject this approach, but he believes very strongly that any economic developer that attempts to implement this strategy should be aware of its underlying goals, values and its origin. In our current world, it is the solution to all urban and community ails, the key which opens up heaven’s doors.

Innovation and Knowledge-Based Economics is very real, but maybe, just maybe it may not solve all problems.

 

Articles in 'Innovation & Knowledge-Based Economics'

Breaking Up [Paradigms] is so Hard-to-Do

President Trump’s challenge compels us to confront the Forgotten People problem swept under the rug by economic developers current paradigms: innovation, knowledge-based economics, university-led economic development, and “gazelle” clusters and occupations. The January article redefines Forgotten People, presents an alternative way to “do” economic development at the state and local level and offers four thought-provoking programs that involve nothing less than a new approach to economic and community development–a community-based, community rebuilding, Back to the New Deal, service sector-focused skills-development employment.

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No Interrupting Peter Thiel: Zero to One

If entrepreneurialism, venture capital, and tech start up are your thing–this is exactly the kind of info you need to help evaluate proposals, perform due diligence on applications, understand tech business plans, and in general, familiarize yourself with technology business formation. Otherwise, this book can be a great crib sheet to follow the TV hit “Silicon Valley”. It is alleged by some that Thiel is the inspiration for the show’s character, Peter Gregory. I recommend Zero to One because it challenges our conventional principles about young tech companies, and introduces the reader to a new way of thinking and offers economic developers new ideas on how to evaluate potentially successful tech start up. Or if you prefer, it does make HBO’s Silicon Valley more hilarious.

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Quo Vadis–Whither Goest the "Margins of our Labor Force"???

Economic and workforce developers typically confront unemployment by providing basic or enhanced skills and repositioning the unemployed into “hot” occupations or growing industry sectors. Alan B. Krueger, Judd Cramer and David Cho, “Are the Long-Term Unemployed on the Margins of the Labor Market”, Brookings Papers, however, challenge this paradigm and wonder if the unemployed may be on the margins of the labor market–on the road to dropping out completely. Who is Alan Krueger–from 2011 to August 2013 he was President Obama’s White House Chair of the Council of Economic Advisors. So what does Krueger have to say?

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Speaking as a Unit of Human Capital

This inequality debate is nothing but potential trouble for economic developers? An economic developer can potentially produce inequality no matter what he or she does. The first step in dealing with inequality is to understand what causes it. For one answer we turn to Brink Lindsey, Human Capitalism: How Economic Growth Has Made Us Smarter–And More Unequal. Lindsey presently with the Cato Institute was a former Senior Research Fellow at Kauffman. His argument turns knowledge-based economics, a popular economic development approach, on its head–suggesting it inadvertently plays a major role in causing inequality.

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Give me that old-time religion — Innovation is good enuf for me!

Innovation has become the rage du jour in economic development. Politicians, especially governors, have incorporated it into their state economic development platforms and policy initiatives. What is this innovation thing and how has it changed in recent years? And why has innovation become so pervasive in state and local economic development public policy?

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Silicon Valley and Route 128: The Camelots of Economic Development

Silicon Valley and the Route 128 Massachusetts Miracle are a bit of reality and myth tossed together like a Caesar salad. In recent years, the Silicon Valley, in particular, has become a Camelot of sorts for economic developers–a place where the mythical king of technology, innovation and creativity ruled over the dominion of the knowledge-based economy. These magical geographies have personified the holy grail of economic development. What are the realities behind these legends? What lessons can we learn?

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The New Geography of Jobs (Enrico Moretti)

Enrico Moretti’s, The New Geography of Jobs (Houghton Mifflin Harcourt, Boston, 2012). has been exceptionally well received by many of the economic development literari. Some commentators have described New Geography as the best economic development book of 2012. And if you don’t read New Geography, you would also miss reading the best, most readable explanation and defense of innovation, knowledge-based economics and their effects on the location of jobs in the United States. There is a lot going on in New Geography. You should read on because what lies below the thematic visible tip of New Geography and innovation economics is its frank and realistic understanding of what innovation economics can do and not do, and, perhaps more important, the linkage of innovation economics with American culture and society.

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What's the Theory Behind Innovation and the Knowledge-Based Economy

Who are the Gods of Innovation and Knowledge-Based Economics? Who “Thunk” It Up? Where Did It Come From? Don’t Know? Then this review is The Perfect Take It to the Beach-Labor Day Reading — Innovation Economics–Everything you wanted to know (AND LOTS AND LOTS MORE) about the economics underlying innovation, creativity, entrepreneurship and the knowledge-based economy. Learn about Romer, Krugman, Lucas, Solow and Schumpter from our review of David Warsh’s, Knowledge and the Wealth of Nations.

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Innovation: A Dirty, Sloppy, Time-consuming and Unfair Process

Innovation is too important a concept, too serious a strategy to be treated with the casualness, simplicity and inevitable benevolence that we read in current literature and blogs. Innovation has become so trivialized we have lost sight of its Luke Skywalker/Darth Vader two edge sword complexity. Instead we have an “everything is beautiful” and it’s “so easy we all can do it” atmosphere. It’s time we sobered up and remember that Innovation is a wonderful but dark, dirty, greedy, timeconsuming and very sloppy economic development strategy.

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