In this video, which is also featured in Marginal Revolution University’s Everyday Economics course, we discuss the key factors behind the rise in innovation and
In this video, which is also featured in Marginal Revolution University’s Everyday Economics course, we discuss the key factors behind the rise in innovation and entrepreneurship over the past couple of centuries.
The economic historian Deirdre McCloskey coined the term “innovationism." While there have always been inventors and innovators, that number exploded after the eighteenth century, contributing to what has been described as the “Hockey Stick of Human Prosperity."
Why has innovation grown so rapidly? Economist Douglass North argued it had to do with institutions such as property rights, non-corrupt courts, and rule of law, which lay the foundation for innovation to take place. Others attribute the rise to factors such as education or access to reliable energy. McCloskey argues that what really kicked innovation into high gear is a change in attitude — ordinary people who once celebrated conquerors and kings began to celebrate merchants and inventors.
In the end, a better understanding of what drives innovation could help poor countries that still live on the handle of the “Hockey Stick" reach a much greater level of prosperity.
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Surprized you did not mention Adam Smith and division of labour, in view of your earlier reference: or examine the evidence for either theory. Do you have some limks for students to explore this aspect? Is take-off still a concept that theorists still use or has it become uninteresting? Did the US 'take-off' more than once: pirating English arms with industrial manufacturing systems, then English literature (encouraging a literate community: i.e. Americans were not just ignorant pioneers), then building a nation built on managing big distances (which Russia never managed) -- e.g. the wagon train, railroad, pony express, department house (adopted from France), telegraph, telephone, cattle drive, creating the mass market and the workers to serve it (New York, Chicago): is innovationism an adequate concept for dealing conceptually with such developments? And is it true that innovationism didn't exist before (16th and 17th century, not to speak of the 18th -- French and American revolutions)? What is your take on this?
I think "take-off" usually describes a country's shift from a period of stagnation (a per year growth close to zero, like an airplane running on the ground level) to a period of significant growth (like an airplane's take-off). In that sense, if we look at growth graphs produced by economic historians we see that the US had only one take-off, in 1800.
"Innovationism" might refer to a growth trend which includes technological tinkering, a set of many small innovations occuring in many parts of the economic system (as Joel Mokyr believes). It also includes a cultural aspect, a positive way of thinking about innovators (Deirdre McCloskey talks about how people started to recognize that the small entrepreneurs who were putting things together in a slightly different way, created value for others, and started allowing them to do more of it).