Understanding Innovation and Growth
Intellectual Background
Innovation is a major driver of advances in the quality of life and human well-being. Indeed economists, the business community and politicians are in rare agreement as they recurrently point to innovation as the primary determinant of increased economic growth. Policy discussions abound about how a given law may effect innovation. Large firms and start-ups struggle to create just the right invention at just the right price to garner market share or build a new market. And yet, innovation remains inadequately understood. Just what is the “secret sauce” that unleashes this gift?
In a sense, “Innovation” is everywhere. It is widely recognized as the key ingredient of sustained economic growth and as the bedrock of improvements in the human experience generally. Programs in “Innovation and ….” have proliferated widely; there are numerous journals devoted to innovation in general and to subtopics in particular; companies are instituting multi-step programs to foster innovation among their employees. Nonetheless, even the most expert scholars and practitioners in a field recognize that there is much to be done in theorizing and modeling innovation and growth within fields and across fields and in creating the social and institutional frameworks that can foster these phenomena. In short, understanding and implementing innovation is still a work in progress.
The Gruter Institute believes that difficult problems in understanding and implementation can benefit from a highly interdisciplinary method of attack. This interdisciplinary approach forms the bedrock of the Institute’s 30-year history. It has lead to a foundation shift forward in a number of challenges at the intersection of law, economics and society, such as the role of morality in economics (see e.g. Moral Markets, the Critical Role of Values in Free Enterprise) to the integration of law and neuroscience. (see e.g. Law & Neuroscience Project).
Interdisciplinary Approach
While innovation of the type that advances the quality of human life remains mysterious, there is a wealth of knowledge about how innovation occurs in a range of complex systems: Evolutionary biology provides tremendous insights into “innovation and growth” in biological phenomena; Anthropology provides insights into innovation and growth in across cultures and societies; Technology treatises recount the fascinating progress of technological innovation from the hand axe to the iPod; Legal and economic history provide insights on various rules and institutions and how they interplay with innovation and growth. The Program’s approach will be to build off of the myriad analyses of innovation and growth in various complex systems and search for commonalities and differences. It is with this systems-level theory of innovation and growth that we can refine our understanding of the first principles: what are the key features that determine the extent to which an ecosystem is receptive to innovation and growth, its “degree of ripeness.”
Sample Research Topics:
Over the past five years, the Institute’s Program on Understanding Innovation has turned its attention to tackling the questions that stand as gateways to improving quality of life through innovation and economic growth. Topics have included:
•What drives the behavior that underlies human creativity and innovation?
•What distinctions can we make between those innovators who are able to commercialize their inventions and those who are not?
•What arrangements – social, institutional and legal – might better capture existing creativity and help bring it to market?
•What institutional and behavioral dynamics lead to high-innovation geographical regions within legal systems (e.g. Silicon Valley)
•How do humans attain – and improve on – the rates of innovation seen in the highest growth economies?
•How do innovation and entrepreneurship lead to economic growth?
•What are the business and legal arrangements that can both adequately reward the creators of innovation and those who turn it into a profitable application?
•What are the costs of translating innovation into economic growth?
•What makes some kind of innovations “game changers,” and how can we best stimulate and support this kind of invention?
•What features of a given system determine its degree of receptivity to innovation? See e.g., Squaw Valley Innovation Index:
⎫Open vs. Closed
⎫Low Barriers to Entry/Incumbents?
⎫Competitive Forces at Play
⎫Contains Interoperability/Standards
⎫Players Not too Comfortable/Complacent
⎫Threat of Not Surviving Exists
⎫Existence of both monetary AND reputational style awards
⎫High Trust Environment
⎫Measurement tools for evaluation of the “need” for innovation
⎫Strong Communication/Information Flows? (human/ human and human/database)
•How can we best invest in projects that will provide not just academic answers to these questions, but dynamic “real world” applications as well?
The Institute has been encouraged by the results of its publications and meetings to date * and is continuing with this interdisciplinary study, dialog, and publication. For more information, please contact gruter(at)gruter.org
The Gruter Institute welcomes and is grateful for the partnerships with other academic, policy, funding, and practitioner organizations for intellectual collaboration and logistical and financial support with this work.
*Recent Conferences and Publications Relating to Innovation and Growth sponsored by the Gruter Institute or fostered through Gruter Institute activities
Conferences Related to Innovation
Conference: “Innovation and Growth: Biological, Economic, Institutional and Technological.” Squaw Valley, CA. May 19-24, 2013.
Workshop: “Workshop on Growth.” Schwab Residential Center, Graduate School of Business, Stanford University. October 12, 2012.
Conference: “Innovation, Economic Growth and Human Behavior.” Squaw Valley, CA. May 20-23, 2012.
Conference: “Economic Growth: Costs, Causes and Effects.” Squaw Valley, CA. May 23-25, 2012.
Conference: “Innovation and Economic Growth: Exploring the Origins of Innovative Behavior.” Squaw Valley, CA. May 25-27, 2011.
“Educating the Digital Lawyer,” Harvard Law School in collaboration with the Berkman Center for Internet & Society’s Law Lab, Cambridge, MA. October 12, 2010.
“New Governance Models” at the Cosmos Club, Washington DC, September 11, 2010, in collaboration with the Government 2.0 conference.
“Governance as an Open Platform,” hosted by the Berkman Center for Internet & Society’s Law Lab, in collaboration with O’Reilly Media, Inc., Washington, D.C., September 9-10, 2010.
“Online Dispute Resolution” at Harvard, June 9, 2010
Conference: “Innovation and Economic Growth: Exploring the Origins of Innovative Behavior.” Squaw Valley, CA. May 26-28, 2010.
“Toward Principles and Best Practices for Operating in the Cloud” at Harvard, May 6-7, 2010.
Conference: “New Models in Venture Finance For Innovation.” Co-organized by the Berkman Center for Internet & Society’s Law Lab with support from the Ewing Marion Kauffman Foundation; at Graduate School of Business, Stanford University. November 19-20, 2009.
“Cloudlaw: Global Digital Infrastructure for E-Services and E-Governance” at Harvard, June15-16, 2009.
Symposium on (then) forthcoming book by Matt Ridley: The Rational Optimist: Economic Progress and the Evolution of the Future. Co-Convened with Matt Ridley, Property and Environmental Research Center and the Gruter Institute with funding from the Marion Ewing Kauffman Foundation; Napa, CA. May 4-6, 2009.
Conference: “Legal Institutions and Entrepreneurship.” Co-sponsored by the Ewing Marion Kauffman Foundation. Center for Advanced Study of the Behavioral Sciences, Stanford University. February 8-9, 2008.
Publications
“Essays on Growth: Economic and Biological.” Essays prepared in conjunction with the “Workshop on Growth,” Stanford University, October 12, 2012.
Publication in Journal of Economic Behavior and Organization (JEBO) of the results of the Gruter Institute’s Moral Markets project (article summary of book of same title). Citation: “Moral Markets” in, Journal of Economic Behavior & Organization 77 (2011) 212–233. (Reprint provided herewith)
“Rules for Growth: Promoting Innovation and Growth Through Legal Reform.” Ewing Marion Kauffman Foundation, 2011. (Note: Chapter by Oliver R. Goodenough – “Digital Firm Formation”)
Moral Markets: The Critical Role of Values in the Economy, Paul J. Zak, Editor, Princeton University Press, 2008.
The Mind of the Market, Michael Shermer, Henry Holt & Co, 2008