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Innovation and dynamism

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  • János Kornai

Abstract

Literature on post‐socialist transformation usually deals with the political, economic and social sides of it, although there have also been important changes in the field of technical advance in the last twenty years. One of capitalism's main virtues is the strong incentive it gives to dynamism, enterprise and the innovation process. Every revolutionary new product (for civilian use) has been brought about by the capitalist system. The socialist system was capable at most of developing new military products. The article analyzes how far the radical difference can be explained by the innate tendencies and basic attributes of the two systems. Our daily lives have been transformed by these new products (for instance, the sphere of information and communications by the computer, the mobile phone and the internet). While many people see all these as favourable changes, fewer discern the causal relation between the capitalist system and rapid technical progress. Yet the usual syllabus of microeconomics does not enlighten students on this important virtue of capitalism, neither it is not adequately emphasized in the statements of leading politicians.

Suggested Citation

  • János Kornai, 2010. "Innovation and dynamism," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 18(4), pages 629-670, October.
    • Handle: RePEc:bla:etrans:v:18:y:2010:i:4:p:629-670
    DOI: 10.1111/j.1468-0351.2010.00396.x
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    References listed on IDEAS

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    2. Foreman-Peck, James & Zhou, Peng, 2022. "R&D subsidies and productivity in eastern European countries," Economic Systems, Elsevier, vol. 46(2).
    3. Foreman-Peck, James & Zhou, Peng, 2021. "Innovation policy and performance of Eastern European Countries," Cardiff Economics Working Papers E2021/15, Cardiff University, Cardiff Business School, Economics Section.
    4. Alexander Brem & Pierre Wolfram, 2017. "Organisation of new product development in Asia and Europe: results from Western multinationals R&D sites in Germany, India, and China," Review of Managerial Science, Springer, vol. 11(1), pages 159-190, January.
    5. Dragan Tevdovski & Katerina Tosevska-Trpcevska & Elena Makrevska Disoska, 2017. "What is the role of innovation in productivity growth in Central and Eastern European countries?," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 25(3), pages 527-551, July.
    6. Jadranka Švarc & Marina Dabić, 2019. "The Croatian path from socialism to European membership through the lens of technology transfer policies," The Journal of Technology Transfer, Springer, vol. 44(5), pages 1476-1504, October.
    7. László Csorba, 2019. "Issues and Types of Adverse Selection and Negative Selection," Financial and Economic Review, Magyar Nemzeti Bank (Central Bank of Hungary), vol. 18(2), pages 87-116.
    8. Matoshi, Ruzhdi & Mulaj, Isa, 2020. "Resurgence of transition economics: Brexit as an expected example, experience and lesson," MPRA Paper 107852, University Library of Munich, Germany.
    9. Iciar Dominguez Lacasa & Alexander Giebler & Slavo Radošević, 2017. "Technological capabilities in Central and Eastern Europe: an analysis based on priority patents," Scientometrics, Springer;Akadémiai Kiadó, vol. 111(1), pages 83-102, April.

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