Innovation as a political process of development: are neo-Schumpeterians value neutral?

Abstract

Technological innovation has been one of the fastest growing areas of economics scholarship and one where history and philosophy have played important roles. Since the reconstruction of Joseph Schumpeter's view of innovation as a driver of capitalist development and the subsequent formation of the national innovation systems (NIS) theory in the early 1990s that can be described as neo-Schumpeterian, there has been a continuous attempt to explain innovation in social-scientific terms. However, much of this has positioned innovation as a value-neutral process. We argue that such value-neutrality requires closer analysis because the neo-Schumpeterian thinkers do appear to acknowledge that capitalism itself is an uneven, dynamic process. The relationship between the vital dynamism of such analysis of technological change and the context of its description of power relations and value deserves further attention. Under what conditions can systemic interactions between institutions and actors function as universal frameworks? Can the theory of innovation be abstracted from its social and political bases? This paper aims to redefine innovation as a predominately political process that is both historical and contextual, and thus draw out its implications for economics and development politics. The paper suggests some preliminary steps toward a more critical approach to innovation scholarship as part of a wider, heated ongoing debate about economics' own relevance and contestation about its methods.

Institutional variety and the future of economics

“…"[..] emphasize that such value-neutrality requires closer analysis because the neo-Schumpeterian thinkers do appear to acknowledge that capitalism itself is an uneven, dynamic process of historical development. Precisely because of this acknowledgement, the relationship between the vital dynamism of such technological change and the context of its power relations and values deserves further attention" (Papaioannou and Srinivas 2019). Thus using the several analytical explanations within the neo-Schumpeterian body of EPE scholarship, we can probe further for systemic explanations of institutional variety in the building of technological capabilities (Papaioannou and Srinivas 2019).…”

“…Precisely because of this acknowledgement, the relationship between the vital dynamism of such technological change and the context of its power relations and values deserves further attention" (Papaioannou and Srinivas 2019). Thus using the several analytical explanations within the neo-Schumpeterian body of EPE scholarship, we can probe further for systemic explanations of institutional variety in the building of technological capabilities (Papaioannou and Srinivas 2019). These can then offer preliminary assertions about how variety is only "developmental" under certain conditions.…”

“…Their focus is firms and their learning environment. Institutional variety results in patterns of learning and innovation ("informal", "below the radar", "scarcity-induced", "bottom of the pyramid") (Papaioannou and Srinivas 2019). Institutional variety can manifest as a complex analytical challenge of highly fragmented, unequal and dynamic systems in which states have specific challenges.…”

“…For example, all 4 cases successively build on the question of the "ex-post" nature of development theories and lend well to notions of fragmented and divergent development which have important implications for evolutionary economics and political economy. The different traditions of fragmented, divergent evolutionary attributes constitute scholars with different interests in innovation for development, where considerable dissent exists in whether innovation is best exemplified within existing industrial traditions or not (Papaioannou and Srinivas 2019). Rather than fighting the internecine warfare of economics against economics, the Nyaya School and its reasoning techniques reminds us that attention to intra-paradigmatic inquiry allows greater refinement of both inclusion and difference of perspective on institutional variety and generates conditional knowledge essential to strengthen the discipline.…”

“…While the existence of institutional variety may be agreed upon, no such consensus in economics arguably exists for studying and inferring from single or multiple institutions. In large part, this gap in theorizing is both a cause and effect of studying some dominant institutions such as markets but neglecting others such as the state or its strategic policies or key stakeholders, e.g., industry associations or universities (Papaioannou and Srinivas 2019;Arocena and Sutz 2000). The paradigmatic core of "mainstream" economics has focused on markets as a primary institution and explanatory variable although developing countries have an especially complex variety of economic activity and breadth of firms (Srinivas 2012;Srinivas 2018a).…”