- We propose the setting up of a dynamic competition initiative to ensure that creating and capturing value from innovation is taken seriously, not just nominally, in policy formulation and execution in liberal democracies employing the rule of law. Friends of the initiative accept the proposition that innovation is the main contributor to the wealth and welfare of rule of law-based nations.
- Economic development, prosperity, and opportunity require innovation to be put at the center of competitive strategy and policymaking. Because innovation almost always generates large positive spillover benefits, private incentives to invest in R&D and related activities are compromised. This requires public policy to be supportive of the innovation process, more so than would otherwise be the case.
- At the heart of the initiative is a belief that a deeper understanding of technological innovation is required for the elaboration of empirically grounded theories focused on the competitive advantage of firms and nations, as well for proper regulation of dynamically competitive systems.
- Since technological innovation stems from complex interactions between managers, organizations, institutions, and technologies, studying innovation requires a broad, holistic, and interdisciplinary lens. Evolutionary economics, complexity economics, and the dynamic capabilities framework are important organizing frameworks and theories that can help interpret facts and evidence.
- An attempt will be made to operationalize an innovation minded approach in the shaping of public policies towards businesses. We seek to develop and advance tools to assist in advancing innovation-based, dynamic competition. Our mission is to align competition policy, technology policy, and industrial policy for the benefit of a whole society and the maintenance of a democratic open liberal order.
1. The creation and adoption of innovation, and supporting institutional and legal structures, is the primary driver of long term economic development and growth.
2. Innovation both drives and is driven by competition. Because of spillovers, value capture by innovation requires creative business models, along with enforceable intellectual property protection.
3. Innovation is a dynamic and emergent process leading to knowledge discovery, the development and commercialization of new products, services, and solutions.
4. Innovation requires investment and sufficient appropriability mechanisms to allow for value capture.
5. There is no predetermined blueprint, model or routine for innovation.
6. Innovation emerges from complex interactions among individuals, organizations, institutions, and technologies, not just industry structure, inter-firm rivalry and strategic positions.
7. Innovation is both dependent upon and disruptive of institutions, established businesses, and interests.
8. Innovation requires organizational capabilities, both ordinary (operational) and dynamic.
9. To deal with fundamental uncertainty, firm-level and public sector innovative capabilities need to aid opportunity recognition (sensing) and action (seizing).
10. A vibrant entrepreneurial-managerial class and a robust venture capital industry is required for innovation in business (and government). Supporting corporate governance structures and regulatory policy is also necessary
- The recognition that volatility, deep uncertainty, complexity, and ambiguity characterize the global economy.
- Complexity theory, evolutionary economics, and the dynamic capabilities approach to organizational economics.
- Evidence based, interdisciplinary, and reasoned heterodoxy approaches.
- Rejection of ideology and disciplinary insularity as sources of cognitive understanding; all policy issues require a multidisciplinary systems perspective.
- Holistic approach, with recourse to deductive, inductive, and abductive reasoning, hard and soft modalities of analysis, and dynamic methods.
- A bias for action and entrepreneurial (Keynesian) “animal spirits.”
- Disequilibrium, not equilibrium, frameworks, and models.
- Dismissal of hyper rationality and (short term) profit maximization assumptions because they are caricatures of individual and organizational decision making.
- Truth-seeking and deep curiosity with respect to innovation ecosystems.
- Interest in a study of the conditions under which business conduct can promote or suppress dynamic competition and innovation.
- Disclosure of sources of conflicts of interest.