What Works in Economic Development: Innovation?
<p>Jonathan Morgan is a School of Government faculty member.</p> <p>This is the fourth post in a series that explores the critical question of what works in economic development? Previous posts have focused on business incubation and suburban revitalization. For one analyst, the most obvious answer to the question of what works can be summed up in one essential concept: innovation.</p> <p>In a paper recently published (Feb. 2012) by the Information Technology & Innovation Foundation, Robert Atkinson calls for a new “doctrine” to guide state and regional economic development efforts. He advocates and sets forth a policy framework based on “innovation economics” that, at its core, is about creating an environment conducive to the formation of new ideas, new firms, new products and services, new technologies, new skills, and new ways of doing nearly everything. Atkinson supports his argument with empirical evidence that demonstrates a positive connection between various innovation indicators (e.g., patent activity, business R&D expenditures, share of knowledge-based industries, college educational attainment) and levels of economic growth (e.g., income and wage gains).</p> <p>The specific policies and strategies associated with Atkinson’s model of innovation-based economic development include:</p> R&D tax credits technology-focused research partnerships between universities and industries cluster/sector-based skills alliances upgrading worker skills entrepreneurial development facilitating industry networks <p>Atkinson does not provide any empirical evidence about how well governmental policies and direct public sector involvement in these activities have worked. Could it be possible that innovation flourishes and drives growth in some places irrespective of what government may or may not do? Probably not, at least at the national level [...]</p>
