Policy and Complex Systems
As Fagerberg rightly notes , “ Students of longrun economic change used to focus on factors such as capital accumulation or the working of markets , rather than on innovation . This is now changing . Research on the role of innovation in economic and social change has proliferated in recent years … and with a bent towards cross-disciplinarity .” 72
The most elaborate international effort to bring Schumpeterian ideas to bear on development efforts is the Global Network for Economics of Learning , Innovation , and Competence Building Systems ( Globelics ), which held its first conference in Denmark in 2002 . Since then Globelics conferences have been held on nearly all continents , and the first Globelics Academy was convened in Lisbon in 2005 . More than 2,000 scholars have participated in Globelics conferences and over 300 doctoral students have been part of the Globelics Academy . Regional Globelics chapters are being created around the world to foster interactions between researchers and policymakers .
In seeking to recast Schumpeter to reflect contemporary economic decisionmaking , it is important to spell out a few key elements of his thinking that enjoy universal appeal . These critical elements should have been the basis upon which to genuinely assess the relevance of his ideas for emerging countries . The most important limitation of many of Schumpeter ’ s critics is that they failed to review his work in its totality but instead tendentiously selected ideas that could be debated outside his overall conceptual framework .
Innovation as creative destruction
Schumpeter ’ s relevance to emerging
countries is his disruptive model that provided the basis for his theory of economic development . Neither entrepreneurs nor markets can function without the existence of basic infrastructure that allows them to produce and transport goods . But building such infrastructure disrupts the existing economic system .
Schumpeter ’ s disruptive model was railroads , a key infrastructure that had profoundly transformed the world he studied . 73 For Schumpeter , railroads were not just a source of economic development per se , but a driving force in improving human welfare , ironically in the same way as advocated by his critics : “ While a new thing is being built and financed , expenditure is on a supernormal level , and through a normal state of incomes we get all those symptoms which we associate with prosperity .” 74
Railroad expansion did not involve creating new technologies but deploying existing ones . In Schumpeter ’ s view , “ getting things done ” was “ pure entrepreneurship stripped of all accessories .” 75 It involved the “ leadership of groups , in successfully dealing with politicians and local interests , in the solution of problems of management and of development in the regions of the roads opened up .” 76 The entrepreneurial function was performed by either individuals or groups of people whose tasks were unrelated to the act of taking financial risks .
72
J . Fagerberg , “ Innovation : A Guide to the Literature ,” in Fagerberg , D . Mowery , and R . Nelson , The Oxford Handbook of Innovation , eds . J . Fagerberg , D . Mowery , and R . Nelson , ( Oxford : Oxford University Press , 2005 ), 1 .
73
Schumpeter , Business Cycles , 304 .
74
J . A . Schumpeter , “ An Economic Interpretation of Our Time : The Lowell Lectures ,” in The Economics and Sociology of Capitalism , ed ., Richard Swedberg ( Princeton , NJ : Princeton University Press , 1941 ), 347-349 .
75
Schumpeter , “ The Meaning of Rationality in the Social Sciences ,” in Swedberg , The Economics and Sociology of Capitalism , 327 .
76
Ibid ., 327 . 16