Invention and economic development

What we now call Innovation policy emerged from the field of innovation economics famously pioneered by the economist Joseph Schumpeter back in 1947. His model of economic development highlighted the relationship between entrepreneurship, innovation, and economic cycles.  Thus, innovative individuals, who have the potential of founding their own small businesses, have become the focus of efforts to regenerate local, regional and national economies. The implicit assumption of this approach is that such individuals are rare and exceptional, a scarce economic resource. However, there are recent developments, which, very significantly, have not emanated from any government office, and have begun to challenge this central assumption, this pillar of economic development policy. These could be described as social or organisational innovations, as distinct from the material/physical/artefactual kind. It’s difficult to say when each of the following developments began to gain purchase, but it’s now possible to see a cluster of ideas converging into a self-organising, bottom-up or grassroots approach to innovating and local economic regeneration. The challenge is for local and central governments to respond, without destroying the spontaneity of this phenomenon.

The converging developments are:

i) The Lean Start-up movement

ii) A user/innovator approach to inventing represented by Jugaad, an approach to innovating emanating from India, and associated ideas such as Frugal Innovation, DIY (USA), Systeme D (France), and reverse innovation (USA). Extreme Inventing I see as a possible addition, but unlike these others is grounded in a new theoretical perspective on inventing and innovating.

iii) The maker movement, which is supported, encouraged and enabled by Maker Magazine.

iv) Crowd sourcing of investment for micro/small businesses —crowd funding. Eg., Kickstarter.com

Each of these will be covered in brief in the accompanying article which was accepted for presentation at the Institute for Small Business and Entrepreneurship conference in Dublin 2012. Each of the above is covered before focussing on the second of these, putting Extreme Inventing into the context of user innovation and highlighting both its practical application and theoretical underpinning. From this I will develop an argument for developing a new approach to local regional economic development policy.