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Innovation according to Nobel Prize laureates

Innovation according to Nobel Prize laureates

Simon Kuznets, awarded in 1971 by the Prize in Economic Science (today: The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel), contributed to the knowledge of innovation [Nobelprize.org 2014]. In his general approach to innovation, Kuznets recalls Schumpeter, and defines innovation as “material changes in the production function” [Kuznets 1954]. The author claims innovation to have “strategic importance in the evolution of capitalist economy” [Kuznets 1954]. Yet, in the later works Kuznets introduces the notion of epochal innovation and analyses the economic growth of nations through epochs. He states that each epoch starts with a major unique innovation [Kuznets 1966], which spreads to a substantial part of the world and constitutes a dominant source of sustained growth.

Jean Tirole received the The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel in 2014. The author focused on the competitive positioning. In “The theory of industrial organisation” [1995] he indicates that the firms innovate either to avoid loosing market share (reactive approach), or to gain strategic market position (proactive approach). At the same time author indicates that product innovation allows the creation of new products, and that process innovation changes the technological possibilities of production.

Author: Dawid Szutowski

 

Sources:

Kuznets, S., 1954, Economic change, William Heinemann ltd, Melbourne-London-Toronto.
Kuznets, S., 1966, Modern Economic Growth. Rate, Structure, and Spread, Yale University Press, New Haven-London.
Nobelprize.org, 2014, Simon Kuznets – Facts, http://www.nobelprize.org (1.3.2015)
Tirole, J., 1995, The theory of industrial organisation, MIT Press.

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