Globalization and Innovation

Globalization and Innovation

Innovation is the lifeline of progress in the modern world and can be viewed from many perspectives.

Take a look at the IdeaFlow blog and its posting and comments thereto on “What Drives Innovation?”

There is also a legal side to innovation: patent law and its enforcement. The Federal Trade Commission (FTC) has an October 2003 report To Promote Innovation: The Proper Balance of Competition and Patent Law and Policy which begins:

“Innovation benefits consumers through the development of new and improved goods, services, and processes. An economy’s capacity for invention and innovation helps drive its economic growth and the degree to which standards of living

increase.1 Technological breakthroughs such as automobiles, airplanes, the personal computer, the Internet, television, telephones, and modern pharmaceuticals illustrate the power of innovation to increase prosperity and improve the quality of our lives.”

The FTC article is a “must read” for all persons involved in the intellectual property field.

Innovation is so important for business that there are government sites devoted to the subject. For example, the government innovation site in the United Kingdom writes:

“The challenge for companies is to bring to the market a stream of new and improved, added-value, products and services that enable the business to achieve higher margins and thus profits to re-invest in the business.

Innovation – the successful exploitation of new ideas – incorporating new technologies, design and best practice is the key business process that enables UK businesses to compete effectively in the global environment.”

The Federal Reserve Board has published online the remarks of its Chairman, Alan Greenspan on May 6, 2004 on the topic of Globalization and Innovation.

Greenspan’s remarks included the following observations about the juncture of globalization and innovation:

“Globalization has altered the economic frameworks of both advanced and developing nations in ways that are difficult to fully comprehend. Nonetheless, the largely unregulated global markets, with some notable exceptions, appear to move effortlessly from one state of equilibrium to another. Adam Smith’s “invisible hand” remains at work on a global scale….

In tandem with increasing globalization, monetary policy, to most observers, has become increasingly effective in achieving the objective of price stability. But because we have not experienced a sufficient number of economic turning points to judge the causal linkages among increased globalization, improved monetary policy, significant disinflation, and greater economic stability, the structure of the transitional paradigm is necessarily sketchy.

Nonetheless, a paradigm encompassing globalization and innovation, far more than in earlier decades, appears to explain the events of the past ten years better than other conceptual constructs.”

Lastly, military innovation has been one of the driving forces for the development of human society ever since mankind has populated the planet. An interesting study is found at:

Philip T. Hoffman, California Institute of Technology, “Why is that Europeans Ended Up Conquering the Rest of the Globe? Prices, the Military Revolution, and Western Europe’s Comparative Advantage in Violence“, August 8, 2004

Indeed, military innovation is quite a current topic and has been well analyzed by Air Vice-Marshal R.A. Mason in Innovation and the Military Mind (Adapted for AU-24 from Air University Review, January-February 1986).

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