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Innovation and Economic Growth

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  • G Cameron

Abstract

This paper surveys the empirical evidence on the link between innovation and economic growth. It considers a number of different measures of innovation, such as R&D spending, patenting, and innovation counts, as well as the pervasive effect of technological spillovers between firms, industries, and countries. There are three main conclusions. The first is that innovation makes a significant contribution to growth. The second is there are significant spillovers between countries, firms and industries, and to a lesser extent from government-funded research. Third, that these spillovers tend to be localized, wit foreign economies gaining significantly less from domestic innovation than other domestic firms. This suggests that although technological 'catch-up' may act to equalize productivity across countries, the process is likely to be slow and uncertain, and require substantial domestic innovation effort.

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  • G Cameron, 1996. "Innovation and Economic Growth," CEP Discussion Papers dp0277, Centre for Economic Performance, LSE.
  • Handle: RePEc:cep:cepdps:dp0277
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