Blog
Revision: Innovation
24th March 2008
Innovation has been defined by the OECD as “The transformation of an idea into a new, improved product, process or service.” This revision mind map looks at the micro and macroeconomic importance of innovation. Successful innovation can be a driving dynamic of a modern, competitive economy. A range of supply and demand-side policies can be used to foster innovative behaviour. Of key importance is the type of market structure in which innovation within the private sector can be encouraged. We must not forget too the potential for innovation in the public sector and in collaborative ventures between countries.
William Baumol has written that “innovative activity—which in other types of economy is fortuitous and optional—becomes mandatory, a life-and-death matter for the firm.”
Gordon Brown has said that “If the past century of economic policymaking has taught us anything, it is that achieving strong long term growth often has less to do with macroeconomic policies that with good microeconomics, including fostering competitive markets that reward innovation and restricting government to only a limited role.”
The mind map includes sections on
What is innovation?
Dynamic efficiency
Product innovation
Process innovation
Market Structures and the Incentive to Innovate
Government policy intervention and promoting innovation
Macroeconomic gains from innovation
Mindmap
Innovation.mmap
Pdf version of the mindmap
Innovation_in_Markets.pdf
Geoff Riley
Geoff Riley FRSA has been teaching Economics for over thirty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD conferences in the UK and overseas.