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Book Details
Abstract
‘The Learning Economy and the Economics of Hope’ brings together the most important contributions by an expert on policies, management and economics of innovation and knowledge. It offers original insights in processes of innovation and learning and it draws implications for economic theory and public policy. It introduces the reader to important concepts such as innovation systems and the learning economy. It throws a new light on economic development and opens up for a new kind of economics – the economics of hope. It offers a fresh perspective on many of the most important global challenges of today showing how full attention to the characteristics of the learning economy needs to be combined with innovation in global governance.
The analysis demonstrates that new technology is developed in an interaction between individuals and organizations and that innovation would not thrive in an economy similar to textbook models of pure markets and perfect competition. It also shows that innovation requires that scientific knowledge is combined with experience based learning and that the performance of innovation systems therefore reflects the combination of research efforts and organizational learning. Growing inequality in income and in access to knowledge and learning is presented as a threat to social cohesion and global well-being. In the concluding part of the book the conceptual framework is used to study how China’s innovation system and policy, Europe’s crisis and underdevelopment in Africa interact is shaping an imbalanced and crisis ridden world system. A new kind of economics, policy learning and new regimes of global governance are presented as elements of hope for the future.
‘This is a compelling book and an exciting read for all those interested in innovation as an interactive process. It brings together more than thirty years of seminal and insightful research on learning, the learning economy and national innovation systems by the leading figure in innovation systems.’
—Franco Malerba, Professor of Applied Economics, Bocconi University, Italy
‘The Learning Economy and the Economics of Hope’ brings together contributions by an expert on policies, management and economics of innovation and knowledge. It offers original insights in processes of innovation and learning and it draws implications for economic theory and public policy. It introduces the reader to important concepts such as innovation systems and the learning economy. It throws a new light on economic development and opens up for a new kind of economics – the economics of hope. It offers a fresh perspective on many of the most important global challenges of today showing how full attention to the characteristics of the learning economy needs to be combined with innovation in global governance if we want to be able to handle these challenges.
‘The Learning Economy and the Economics of Hope’ presents work published between 1985 and 1992 and introduces the core concepts innovation as an interactive process. The analysis demonstrates that new technology is developed in an interaction between individuals and organisations and that innovation would not thrive in an economy similar to textbook models of pure markets and perfect competition. It also presents articles that were published between 2004 and 2010. These may be seen as further developments and evidence-based consolidation of ideas that were presented more than ten years earlier. It presents the learning economy through the perspective of the economics of knowledge. The concluding part of the book includes three papers that make use of the conceptual frameworks developed in an analysis of China’s innovation system and policy, Europe’s crisis and Africa’s underdevelopment.
Bengt-Åke Lundvall is professor in economics at Aalborg University and world leading expert on innovation and development.
‘Presented as a journey in the process of understanding innovation systems and the learning economy, this book is a major shift in economic perspective and provides a roadmap for designing a better future. Indispensable for social scientists and politicians, teachers and students, policy makers and all interested citizens in these uncertain times.’
—Carlota Perez, Professor, London School of Economics and University of Sussex, UK, and Nurkse School, Estoni
Table of Contents
| Section Title | Page | Action | Price |
|---|---|---|---|
| Cover | Cover 1 | ||
| Front Matter | i | ||
| Half-title | i | ||
| Series-information | ii | ||
| Title page | iii | ||
| Copyright information | iv | ||
| Table of contents | v | ||
| List of tables | xi | ||
| List of figures | xiii | ||
| Preface | xv | ||
| Part I Introduction | 1 | ||
| Chapter (1) | 3 | ||
| Chapter 1 Contributions to the Learning Economy: Overview and Context | 3 | ||
| 1.1 The Structure of the Book | 4 | ||
| 1.1.1 Part II: Innovation as an interactive process | 4 | ||
| 1.1.2 Part III: Economics of knowledge and learning | 7 | ||
| 1.1.3 Part IV: Continental transformations and global challenges | 10 | ||
| 1.1.4 Part V: Economics of hope or despair – what next? | 13 | ||
| 1.2 What Is Wrong with Economics? | 13 | ||
| References | 15 | ||
| Part II Innovation as Interactive Process | 17 | ||
| Chapter (2-5) | 19 | ||
| Chapter 2 Product Innovation and User–Producer Interaction | 19 | ||
| 2.1 Introduction | 19 | ||
| 2.2 The Framework | 20 | ||
| 2.2.1 Innovation and innovative activity | 20 | ||
| 2.2.2 Technical opportunity and user needs | 21 | ||
| 2.2.3 The separation of the user from the innovating unit | 21 | ||
| 2.2.4 Innovation and production | 21 | ||
| 2.2.5 Consumers and professional users | 22 | ||
| 2.2.6 Behavioural assumptions | 23 | ||
| 2.2.7 Information | 24 | ||
| 2.2.8 Linkages and channels of information | 24 | ||
| 2.2.9 The stability of relationships | 25 | ||
| 2.3 Product Innovation and the Organized Market | 26 | ||
| 2.3.1 Producer dependence – information about user needs as an input to the innovative process | 26 | ||
| 2.3.2 User dependence – information necessary to adopt and adapt product innovations | 27 | ||
| 2.3.3 Incentives to exchange information | 27 | ||
| 2.3.4 The need for cooperation between user and producer | 27 | ||
| 2.3.5 Perfect competition and product innovations | 28 | ||
| 2.3.6 Small numbers and product innovations | 30 | ||
| 2.3.7 The limits of vertical integration | 32 | ||
| 2.3.8 The organized market and product innovations | 34 | ||
| 2.3.9 Williamson on innovations and technical change | 35 | ||
| 2.4 Unsatisfactory Innovations | 36 | ||
| 2.4.1 Dairy processing – a case of hyper-automation | 37 | ||
| 2.4.2 Clothing industry – a case of unexploited technical opportunities | 38 | ||
| 2.4.3 Waste water treatment – lack of interdisciplinary innovations | 40 | ||
| 2.4.4 Software products – a case of ‘hyper-centralization’ | 41 | ||
| 2.4.5 Concluding remarks | 43 | ||
| 2.5 User–Producer Perspective on Location of Production | 44 | ||
| 2.5.1 Distance and costs of transportation and communication | 44 | ||
| 2.5.2 The cultural distance | 45 | ||
| 2.5.3 Paradigms and basic innovations | 45 | ||
| 2.5.4 Proximity and innovativeness | 47 | ||
| 2.6 The Science–Technology Nexus | 47 | ||
| 2.6.1 Technology push or demand pull? | 48 | ||
| 2.6.2 A system of innovation | 49 | ||
| 2.6.3 Science-based industries | 50 | ||
| 2.6.4 The interaction between university and industry | 51 | ||
| 2.7 Units of Analysis and Propositions | 54 | ||
| 2.8 A Final Remark | 57 | ||
| Notes | 57 | ||
| References | 58 | ||
| Chapter 3 Innovation as an Interactive Process: From User–Producer Interaction to the National Systems of Innovation | 61 | ||
| 3.1 Introduction | 61 | ||
| 3.2 The Micro-Foundation: Interaction between Users and Producers | 61 | ||
| 3.2.1 Product innovations in a pure market | 62 | ||
| 3.2.2 Product innovations and transaction costs | 63 | ||
| 3.2.3 The organized market as solution | 64 | ||
| 3.2.4 User–producer interaction in the process of innovation | 64 | ||
| 3.2.5 What determines the strength of the elements of organization? | 66 | ||
| 3.2.6 The flow of information | 66 | ||
| 3.2.7 The selectivity of user–producer interaction | 66 | ||
| 3.2.8 User–producer relationships in time | 67 | ||
| 3.2.9 User–producer relationships in space | 67 | ||
| 3.2.10 Vertical integration as a means of overcoming geographical and cultural distance | 68 | ||
| 3.2.11 User and producer characteristics and the innovative potential of interaction | 68 | ||
| 3.2.12 Unsatisfactory innovations | 69 | ||
| 3.2.13 Is innovation induced by supply or by demand? | 70 | ||
| 3.2.14 Some implications for industrial and technology policy | 71 | ||
| 3.2.15 Standard microeconomics and the user–producer approach | 72 | ||
| 3.3 National Systems of Innovation | 73 | ||
| 3.3.1 The nation as a framework for user–producer interaction | 73 | ||
| 3.4 National Systems of Production | 75 | ||
| 3.4.1 Production and innovation | 75 | ||
| 3.4.2 The vertical division of labour in the national system of innovation | 76 | ||
| 3.4.3 Flows and stocks in the national system of innovation | 76 | ||
| 3.4.4 Science and technology in a user–producer perspective | 77 | ||
| 3.4.5 Introducing the final users of technology into the system | 78 | ||
| 3.4.6 Social innovation as the basis for technical innovation | 80 | ||
| 3.5 Conclusion | 80 | ||
| Notes | 81 | ||
| References | 81 | ||
| Chapter 4 National Systems of Innovation: Towards a Theory of Innovation and Interactive Learning | 85 | ||
| 4.1 Introduction | 85 | ||
| 4.2 National Systems of Innovation | 86 | ||
| 4.2.1 A first definition | 86 | ||
| 4.2.2 Nation states and national systems | 87 | ||
| 4.2.3 National systems, globalization and regionalization | 87 | ||
| 4.2.4 Public policy and national systems of innovation | 89 | ||
| 4.2.5 Performance of national systems of innovation | 90 | ||
| 4.2.6 The normative dimension | 91 | ||
| 4.3 Towards a Theory | 92 | ||
| 4.3.1 Innovation as a cumulative process | 92 | ||
| 4.3.2 Learning and the structure of production | 94 | ||
| 4.3.3 Learning and the institutional set-up | 95 | ||
| 4.3.4 Product innovation and user–producer interaction | 95 | ||
| 4.3.5 Learning, searching and exploring | 95 | ||
| 4.3.6 Incremental versus radical innovations | 96 | ||
| 4.3.7 Defining the NSI – the role of theory and history | 97 | ||
| 4.4 The Elements of the System | 98 | ||
| 4.5 Opening the System | 100 | ||
| 4.6 Alternative Approaches and Methods | 101 | ||
| 4.6.1 Introduction | 101 | ||
| 4.6.1.1 Friedrich List | 101 | ||
| 4.6.1.2 Christopher Freeman | 101 | ||
| 4.6.1.3 Richard Nelson | 101 | ||
| 4.6.1.4 Michael Porter | 102 | ||
| 4.6.1.5 Different methods to analyse national systems of innovation | 103 | ||
| Notes | 103 | ||
| References | 104 | ||
| Chapter 5 The Learning Economy | 107 | ||
| 5.1 Introduction | 107 | ||
| 5.2 The Knowledge-Intensive Economy | 108 | ||
| 5.3 Knowledge Intensity and Learning in the Post-Fordist Era | 109 | ||
| 5.4 What Is Economic Knowledge? | 112 | ||
| 5.5 Is Knowledge a Scarce Resource? | 116 | ||
| 5.6 Interactive Learning | 117 | ||
| 5.7 Remembering and Forgetting | 118 | ||
| 5.8 Learning in Pure and Mixed Economies | 119 | ||
| 5.9 The Organized Market as Institutional Response | 121 | ||
| 5.10 Benefits and Costs of Organized Markets | 122 | ||
| 5.11 Government Intervention in the Learning Economy | 124 | ||
| 5.12 The Means to Learn | 126 | ||
| 5.13 The Incentives to Learn | 126 | ||
| 5.14 The Capability to Learn | 127 | ||
| 5.15 Access to Relevant Knowledge | 127 | ||
| 5.16 Learning to Forget | 128 | ||
| 5.17 Concluding Remarks | 128 | ||
| References | 129 | ||
| Part III ECONOMICS OF KNOWLEDGE AND LEARNING | 131 | ||
| Chapter (6-9) | 133 | ||
| Chapter 6 From the Economics of Knowledge to the Learning Economy | 133 | ||
| 6.1 Introduction | 133 | ||
| 6.2 A Terminology of Knowledge | 134 | ||
| 6.2.1 Is knowledge a public or a private good? | 134 | ||
| 6.2.2 Four different kinds of knowledge | 136 | ||
| 6.2.3 How public or private are the four kinds of knowledge? | 137 | ||
| 6.2.4 Most knowledge is neither strictly public nor strictly private | 139 | ||
| 6.2.5 On tacitness and codification of knowledge | 140 | ||
| 6.3 An Economic Perspective on the Production, Mediation and Use of Knowledge | 141 | ||
| 6.3.1 What is produced when firms produce knowledge? | 141 | ||
| 6.3.2 Innovation as one major outcome of knowledge production | 142 | ||
| 6.3.3 Competence as the other major outcome of knowledge production | 143 | ||
| 6.3.4 Production of knowledge as a separate activity or as a byproduct... | 145 | ||
| 6.3.5 Mediation of knowledge | 146 | ||
| 6.4 Towards the Learning Economy | 148 | ||
| 6.5 Conclusion | 149 | ||
| Notes | 150 | ||
| References | 151 | ||
| Chapter 7 Forms of Knowledge and Modes of Innovation | 155 | ||
| 7.1 Introduction | 155 | ||
| 7.2 What Is Knowledge? | 156 | ||
| 7.2.1 Explicit versus implicit knowledge | 156 | ||
| 7.2.2 Local versus global knowledge | 157 | ||
| 7.2.3 From know-what to know-who | 158 | ||
| 7.3 Forms of Knowledge and Modes of Learning | 159 | ||
| 7.3.1 The STI-mode | 159 | ||
| 7.3.2 The DUI-mode | 160 | ||
| 7.4 The Need for a New Empirical Approach | 162 | ||
| 7.5 Empirical Analysis | 163 | ||
| 7.5.1 Illustrating empirically how DUI- and STI-learning promote innovation | 163 | ||
| 7.5.2 Developing indicators of STI- and DUI-mode learning | 165 | ||
| 7.6 Conclusion: Implications for Innovation Analysis and Policy | 172 | ||
| Notes | 179 | ||
| References | 180 | ||
| Chapter 8 How Europe’s Economies Learn: A Comparison of Work... | 183 | ||
| 8.1 Introduction | 183 | ||
| 8.2 Measuring Forms of Work Organization in the European Union | 185 | ||
| 8.2.1 Variety in European organizational practice | 189 | ||
| 8.3 How Europe’s Economies Work and Learn | 191 | ||
| 8.3.1 National effects on the diffusion of organizational practice | 196 | ||
| 8.4 Measuring Differences in Innovation Mode | 199 | ||
| 8.5 The Relation between Organizational Practice and Innovation Mode | 201 | ||
| 8.6 Differences between Manufacturing and Services | 206 | ||
| 8.7 Conclusion | 210 | ||
| Notes | 217 | ||
| References | 219 | ||
| Chapter 9 Postscript: Innovation System Research; Where it Came From and Where it Might go | 223 | ||
| 9.1 Introduction | 223 | ||
| 9.2 A Concept with Roots Far Back in History | 225 | ||
| 9.2.1 Milestones in the development of the innovation system concept | 225 | ||
| 9.2.2 Innovation research starting with Adam Smith | 227 | ||
| 9.2.3 Friedrich List on the need for an active state to build innovation systems | 228 | ||
| 9.2.4 Karl Marx on technological progress | 228 | ||
| 9.2.5 Marshall’s contribution | 229 | ||
| 9.2.6 Joseph Schumpeter as the grandfather of modern innovation theory | 230 | ||
| 9.2.7 Christopher Freeman as the father of modern innovation theory | 231 | ||
| 9.2.8 The flourishing 1980s | 231 | ||
| 9.2.9 Intentions behind the original conceptualization of national systems of innovation | 234 | ||
| 9.3 National Innovation System as Analytical Focusing Device | 234 | ||
| 9.3.1 Theoretical elements entering into the innovation system concept | 234 | ||
| 9.3.2 Knowledge and learning | 236 | ||
| 9.3.3 The theory behind innovation systems | 237 | ||
| 9.3.4 The NSI perspective is more complex – not less theoretical – than standard economics | 238 | ||
| 9.3.5 Standard economics favours narrow interpretation of innovation systems | 239 | ||
| 9.4 Challenges for Innovation System Research | 240 | ||
| 9.4.1 Causality in a systemic context | 240 | ||
| 9.4.2 Understanding knowledge and learning | 241 | ||
| 9.4.3 The coevolution of the division of labour, interaction and cooperation | 241 | ||
| 9.4.4 Firms as sites for employee learning | 243 | ||
| 9.4.5 The weak correlation between strength of the science-based and economic performance | 244 | ||
| 9.5 National Systems of Innovation and Economic Development | 247 | ||
| 9.5.1 Welfare and inequality in the context of innovation systems | 250 | ||
| 9.5.2 On the sustainability of innovation systems | 251 | ||
| 9.5.3 The role of the state and the commodification of knowledge | 252 | ||
| 9.5.4 Higher education, innovation and economic development | 254 | ||
| 9.6 Conclusions | 256 | ||
| Notes | 257 | ||
| References | 259 | ||
| Part IV Continental Transformations and Global Challenges | 267 | ||
| Chapter (10-13) | 269 | ||
| Chapter 10 China's Innovation System and the Move Towards Harmonious Growth and Endogenous Innovation | 269 | ||
| 10.1 Introduction | 269 | ||
| 10.2 The Transition of China’s Economy | 270 | ||
| 10.2.1 Reforms and development performance in the 1980s and 1990s | 272 | ||
| 10.2.2 Export-led growth | 274 | ||
| 10.2.3 Domestic demand and investment | 276 | ||
| 10.2.4 A unique pattern of economic growth | 279 | ||
| 10.2.5 Limits to growth | 280 | ||
| 10.3 The Transformation of China’s Innovation System | 282 | ||
| 10.3.1 The attempt to reconfigure the user–producer relationships | 282 | ||
| 10.3.2 The adaptive policy process and the recombination of competences | 285 | ||
| 10.3.3 A review of the transformation of the innovation system | 287 | ||
| 10.4 Problems, Debates and Challenges | 289 | ||
| 10.4.1 ‘Endogenous innovation’ and policy debates | 290 | ||
| 10.4.2 Endogenous innovation as strategic element of innovation-driven growth and learning-based economic development | 291 | ||
| 10.4.3 Reconfiguring innovation systems in the context of the globalizing learning economy | 292 | ||
| 10.4.4 Innovation policies to overcome the limits to growth and foster endogenous innovation and harmonious development | 294 | ||
| 10.4.5 Social capital and endogenous innovation | 298 | ||
| 10.5 Conclusion | 299 | ||
| Notes | 299 | ||
| References | 301 | ||
| Chapter 11 The ‘New New Deal’ as a Response to the Euro-Crisis | 305 | ||
| 11.1 Introduction | 305 | ||
| 11.2 Innovation and the Division of Labour | 306 | ||
| 11.3 The Learning Economy | 306 | ||
| 11.4 Modes of Innovation and Innovation Performance | 307 | ||
| 11.5 How Europe’s Economies Learn | 309 | ||
| 11.6 Education and Training for Learning Organizations | 312 | ||
| 11.7 Skill Requirements in Firms Engaged in Organizational Change | 314 | ||
| 11.8 The Role of Universities in the Learning Economy | 316 | ||
| 11.9 Linking Modes of Learning to Measures of Employment and Unemployment Security | 317 | ||
| 11.10 Degree of Inequality in Access to Organizational Learning in Europe | 319 | ||
| 11.11 The Euro-Crisis and Europe’s Uneven Development | 321 | ||
| 11.12 Policy Recommendations | 322 | ||
| 11.13 The Roads Ahead for Europe | 322 | ||
| Notes | 323 | ||
| References | 324 | ||
| Chapter 12 Growth and Structural Change in Africa: Development Strategies For the Learning Economy | 327 | ||
| 12.1 Introduction | 327 | ||
| 12.2 Recent Developments in Africa’s Economies | 329 | ||
| 12.2.1 Growth and structural change | 329 | ||
| 12.2.2 Insufficient job creation and poverty reduction | 329 | ||
| 12.2.3 Growth-reducing structural change | 330 | ||
| 12.2.4 National technological capabilities in Africa | 331 | ||
| 12.3 What Is Development? | 331 | ||
| 12.3.1 A neoclassical theory of development | 331 | ||
| 12.3.2 Development economics | 332 | ||
| 12.3.3 Aggregate growth and structural change | 333 | ||
| 12.3.4 Learning, innovation and development | 335 | ||
| 12.4 Transformation Pressure, Learning Capacity and Redistribution | 337 | ||
| 12.4.1 Why we need to broaden the innovation system concept | 338 | ||
| 12.4.2 Mediating transformation pressure | 339 | ||
| 12.4.3 Development strategies responding to transformation pressures | 340 | ||
| 12.4.4 Macro conditions for development | 341 | ||
| 12.4.5 Investment and finance | 341 | ||
| 12.4.6 Educated labour | 342 | ||
| 12.5 Public Policy and Institutional Design | 343 | ||
| 12.5.1 Nondiscrimination as development strategy | 343 | ||
| 12.5.2 Industrial and trade policy | 343 | ||
| 12.5.3 Industrial policies as learning processes | 344 | ||
| 12.5.4 Environmental policy as industrial policy | 345 | ||
| 12.5.5 The BRICS connection and below-the-radar innovation | 345 | ||
| 12.5.6 The global regime for knowledge protection and sharing | 346 | ||
| 12.5.7 The natural resource curse and the need to promote manufacturing... | 346 | ||
| Notes | 348 | ||
| References | 348 | ||
| Chapter 13 National Innovation Systems and Globalization | 351 | ||
| 13.1 Introduction | 351 | ||
| 13.2 Technological Infrastructure and International Competitiveness | 353 | ||
| 13.3 Product Innovation and User–Producer Interaction | 355 | ||
| 13.4 Each of the Origins Gives Rise to New Streams of Analysis | 357 | ||
| 13.5 What Are the Prerequisites for Catching-Up? | 358 | ||
| 13.6 Interactive Learning in Regional Systems of Innovation | 359 | ||
| 13.7 The Global Value Chain Approach | 362 | ||
| 13.8 Relating the Global Value Chain Approach to the Original NSI Contributions | 365 | ||
| 13.9 On the Importance of Building a Strong National Innovation System | 366 | ||
| 13.10 Conclusion | 367 | ||
| Notes | 370 | ||
| References | 370 | ||
| Part V Economics of Hope or Despair: What Next? | 375 | ||
| Chapter (14) | 377 | ||
| Chapter 14 The Learning Economy and the Economics of Hope | 377 | ||
| 14.1 The Economics of Hope | 377 | ||
| 14.2 The Learning Economy | 378 | ||
| 14.3 Experience-Based Learning Is Not Always Progressive | 378 | ||
| 14.4 Europe as a Learning Economy | 379 | ||
| 14.5 Europe’s Austerity Response to the Financial Crisis | 380 | ||
| 14.6 China’s Growth and Investment in Knowledge | 381 | ||
| 14.7 Growth and Structural Change in Africa | 382 | ||
| 14.8 Europe, China and Africa – Different but Interconnected Challenges | 383 | ||
| 14.9 Financialization, Innovation and Learning | 385 | ||
| 14.10 Coordinated Efforts to Establish a Green Trajectory | 386 | ||
| 14.11 Demographic Crises and Migration in the Context of the Globalizing Learning Economy | 389 | ||
| 14.12 Learning in Geographical Space – towards a New Research Agenda | 391 | ||
| 14.13 Conclusions | 393 | ||
| References | 394 | ||
| End Matter | 397 | ||
| List of contributors | 395 | ||
| Index | 397 |