By Prof. Dr. Susanne Fengler
Innovation is the foundation of sustained economic growth and development. While early stages of economic development and take-off are associated with investment in physical capital – e.g. factories, housing, roads, bridges, railroads, sewer systems –, this only works up to a point. The reasoning behind this is straightforward: if we are simply reproducing existing products and processes over and over again — this is what mass-production is all about – eventually growth will peter out (US economist Robert Solow’s standard growth model developed in the 1950s, nobel prize 1987).
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