Innovation is not just at the top

An interesting article by Amar Bhide, of Columbia University’s business school, argues that “innovation” means more than just brilliant new ideas by scientists and engineers. Innovation exists throughout the economy. So a national economy becomes more vibrant when everyone learns to think in innovative ways.

The article is ‘Venturesome Consumption, Innovation and Globalisation‘, presented in Venice at the CESifo and Centre on Capitalism and Society conference, July 21st-22nd, and it is summarized nicely in this week’s Economist:

The most important part of innovation may be the willingness of consumers, whether individuals or firms, to try new products and services, says Mr Bhide. In his view, it is America’s venturesome consumers that drive the country’s leadership in innovation. Particularly important has been the venturesome consumption of new innovations by American firms. Although America has a lowish overall investment rate compared with other rich countries, it has a very high rate of adoption of information technology (IT). Contrast that with Japan (the original technology bogeyman from the East) where, despite an abundance of inventive scientists and engineers, many firms remain primitive in their use of IT.