On the co-evolution of innovation and demand: Some policy implications

Pier Paolo Saviotti (1) , Andreas Pyka (2)

1 GAEL - Laboratoire d'Economie Appliquée = Grenoble Applied Economics Laboratory
2 Economics Institute

The main objective of this paper is to establish that innovation could not have contributed to economic development unless a demand for the goods and services created by innovation existed. We explore the conditions required for such a demand to exist and argue that the process which gave rise to the observed path of economic development was the co-evolution of demand and innovation. Furthermore, we explore how the co-evolution of demand and innovation changed the capitalist economic system from one in which most people could afford only bare necessities to one in which most people have a highly and increasingly varied pattern of consumption, including a growing proportion of items which cannot be judged necessities, and which are of higher quality than in the past. Finally, we study the possible impact of economic policies on the above co-evolutionary process. We carry out these explorations by means of an extension of our TEVECON model of economic development, which is described in the following part of the paper.

Domaines: Sciences du Vivant [q-bio]

Pier Paolo Saviotti, Andreas Pyka. On the co-evolution of innovation and demand: Some policy implications. Revue de l'OFCE, 2012, 124, pp.347-388. ⟨10.3917/reof.124.0347⟩. ⟨hal-01172129⟩