He argued that evolving institutions, entrepreneurs, and technological changes were at the heart of economic growth; however, it is only in the early 21st century that "innovation economy", grounded in Schumpeter's ideas, became a mainstream concept.
[2] In contrast to his contemporary John Maynard Keynes, Schumpeter contended that evolving institutions, entrepreneurs and technological change were at the heart of economic growth, not independent forces that are largely unaffected by policy.
Economic growth in innovation economics is the end-product of:[5][6] In 1970, economist Milton Friedman said in The New York Times that a business's sole purpose is to generate profits for their shareholders, and companies that pursued other missions would be less competitive, resulting in fewer benefits to owners, employees, and society;[7] however, 21st-century data shows that while profits matter, good firms supply far more, particularly in bringing innovation to the market.
For instance: Concisely, evidence shows that innovation contributes to steady economic growth and rise in per capita income;[8] however, some empirical studies investigating the innovation-performance-link lead to rather mixed results and indicate that the relationship is more subtle and complex than commonly assumed.
[13] In particular, the relationship between innovativeness and performance seems to differ in intensity and significance across empirical contexts, environmental circumstances and conceptual dimensions.
[14] Because the primary domain of innovation is commerce, the key data resides there, continually out of campus reach in reports hidden within factories, corporate offices and technical centers.
Recent attempts at data transference have led not least to the positive link being upgraded to exact algebra between R&D productivity and GDP, allowing prediction from one to the other.
In global economic restructuring, location has become a key element in establishing competitive advantage as regions focus on their unique assets to spur innovation (i.e. information technology in Silicon Valley, or digital media in Seoul).