Innovation, economic diversification and human development
AbstractIn this paper we bridge a gap between innovation economics and the human development approach by analyzing positive and negative effects of different types of economic diversification on social welfare. Economic variety is a driver and outcome of economic development. However, diversification leads to ambiguous effects on the well-being of human agents: on the one hand, increasing variety augments the freedom of human agents to choose. On the other hand, it can overburden their capabilities to make economic decisions and can deteriorate their well-being. It becomes clear that human development policy has to go hand in hand with an industrial policy that promotes qualitative economic diversification. Depending on its dynamics, this diversification can be achieved via related and unrelated variety. We can expect a better design of development policies from a better understanding of the co-evolutionary development of variety, freedom of choice and well-being. --
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Bibliographic InfoPaper provided by University of Hohenheim, Center for Research on Innovation and Services (FZID) in its series FZID Discussion Papers with number 65-2013.
Date of creation: 2013
Date of revision:
innovation; economic diversification; human development;
Find related papers by JEL classification:
- O10 - Economic Development, Technological Change, and Growth - - Economic Development - - - General
- O54 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean
- E11 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Marxian; Sraffian; Institutional; Evolutionary
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-03-09 (All new papers)
- NEP-DEV-2013-03-09 (Development)
- NEP-INO-2013-03-09 (Innovation)
- NEP-KNM-2013-03-09 (Knowledge Management & Knowledge Economy)
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