Political Aspects of Innovation

The Political Aspect of Innovation (PAI) framework is conceptualized to understand the role of innovation policy in the public domain as governments now increasingly make innovation the core in policy formulation for economic development. Attention is concentrated on the response of the main economic agents, namely entrepreneurs and capitalists, in reacting to innovation policy put forward by government. The concept is derived from Kalecki’s perception of fear possessed by the capitalists when government implements full employment policy devised to reduce the dangerous effect of the business cycle [27].

(Effendi and Courvisanos, 2012: 247)

PAI is also based on class analysis that applies these same three fears, but this time in relation to innovation and not to employ- ment. Rothbarth [28] argues that uncertainty created by the innovation process leads to strong dependence of physical investment (whether by equity funds or by leverage with debt funds) on current profits. To Rothbarth, it is this argument which connects Schumpeter’s innovation to the work of Kalecki on investment. Synthesis between Schumpeter and Kalecki, identified by Rothbarth, provides the starting point for the PAI critique of the role of innovation and public innovation policy in the current situation where there is a struggle between the monopoly power enshrined

(Effendi and Courvisanos, 2012: 247-8)

Effendi, P. and Courvisanos, J. 2012. Political aspects of innovation: Examining renewable energy in Australia. Renewable Energy, Vo 38, pp.245-252.

See also evasive innovation

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