Working Paper Series
An Innovation Policy Framework: Bridging the Gap between Industrial Dynamics and Growth
() and Magnus Henrekson
Abstract: This paper examines policy measures that foster the
creation of innovations with high inherent potential and that
simultaneously provide the right incentives for individuals to create and
expand firms that disseminate such innovations in the form of highly valued
products. In so doing, we suggest an innovation policy framework based on
two pillars: (i) the accumulation, investment, and upgrading of knowledge
and (ii) the implementation of mechanisms that enable knowledge to be
exploited such that growth and societal prosperity are encouraged.
Knowledge is a necessary but far from sufficient condition for growth. To
secure industrial dynamics and growth in the long term, institutions must
be designed both to encourage sophisticated knowledge investments and to
stimulate the creation, diffusion and productive use of knowledge in all
sectors of the economy. We argue that the latter area has been overlooked
in the policy discussion and that a coherent innovation policy framework
must include tax policy, labor market regulation, savings channeling,
competition policy, housing market regulation, and infrastructure to foster
growth and future prosperity.
Keywords: Entrepreneurship; Innovation; Institutions; Innovation policy; R&D; Technology transfer; University-industry relations; (follow links to similar papers)
JEL-Codes: J24; O31; O32; O57; (follow links to similar papers)
42 pages, January 12, 2015
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Full text versions of the paper:
- This paper is published as:
Braunerhjelm, Pontus and Magnus Henrekson, (2016), 'An Innovation Policy Framework: Bridging the Gap between Industrial Dynamics and Growth' in Audretsch, David B. and Albert N. Link (eds.) Essays in Public Sector Entrepreneurship, International Studies in Entrepreneurship, chapter 4, pages 95-130, Springer, ISBN ISBN 978-3-319-26676-3.
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