Introduction MELF Equation Macro Metrics Micro Metrics Beyond GDP How To Access Acknowledgements About Us
is still missing pieces,
Innovation in Economics
It’s apparent to most thinkers that innovation should connect with economic growth. But Economics is incomplete. It defaults to a proxy called Factor Productivity - a principal outward manifestation of Growth Theory - whose sufficiency remains conjectural, and within which innovation is a remainder. Or it puts innovation into intellectual capital - an intangible stock - from which future technology and products are presumed to develop without enumerating when or how. Neither helps understanding the digital economy. Such shortfall invites explanation - and excuse. The excuse occupies the next two paragraphs; the explanation the next six pages, and a hundred more of original scholarship. Economics has missed an industry standard, the Innovation Funnel, which controls output to commercialization. The mechanism for successful passage through this funnel is an essential consideration on which Economics remains silent. That's a consequence of what the perceptive economist Zvi Griliches once called its 'data constraint'. He exhorted economists to overcome it, but only outsiders could do so. That's because business lore is systemically out of academic reach. It's hidden away from campuses; within factories, corporate offices and especially in technical centers. And most of it relates to successful funnel passage. Access to tacit knowledge allows Innovation Professionals to use these resources to serve commercial purposes. Incorporation of Economics is a natural extension, contingent only on the de-fragmentation of neglected data. The outcomes address two well-known knowledge gaps in Economics. What economists have identified as Economics' 'Quality Change Problem' is one. The other is the long sought never found numerical link between current innovation spending and future GDP. When armed with these missing elements the dominating factor for economic growth clearly emerges. Innovation metrics control the funnel through which any technology must pass to become commercial. Its products then overcome market incumbents by the process called creative destruction. Growth can be calculated upwards from first principles. Such capability bestows global economic advantage.