Can innovation solve the economic crisis?

Loh Hu 2/18/2013

In this paper, I examine how the theory of technological innovation waves could contribute to solving the ongoing economic crisis. Primarily, my stance remains that innovation in itself is insufficient to solve the economic crisis unless there exists a matching techno-economic paradigm where national, supranational and global efforts are coordinated for a full deployment of technological revolution.

Can innovation solve the economic crisis?
Background
There has been a wide international debate on the causes and possible solutions to the economic crisis that emerged in 2007 – 2008 (Ranga and Etzkowitz 2012). The economic crisis sweeps across the global financial system rapidly and furiously as markets are globally integrated (Gore 2010). Hence, the responses to the global economic crisis are not only enclosed within a nation’s or a coalition government’s approach. Rather, a global coordinated response is warranted as well. Economic stimulus packages addressing short-term and long-term problems have been adopted in most countries as well as the European Commission (Ranga and Etzkowitz 2012). Internationally, the United States of America and European Union have recently been discussing on a free-trade agreement to remove trading barriers between the two important economic powers and boost the economies (BBC News Business 2013). Globally, the G-20 group of major economies have considered proposals on international financial regulation, anti-protectionism and economic support measures at the November 2008 summit (Ranga and Etzkowitz 2012). Although important national and international resources have been pumped into the stimulus packages, with some countries introducing fiscal packages of unprecedented size, evidence of its success today is mixed (OECD 2009). Despite reported successes, the impacts of