Financial intermediation in a model of growth through creative destruction

This paper presents an endogenous growth model in which the research activity is financed by intermediaries that are able to reduce the incidence of researcher's moral hazard. It is shown that financial activity is growth promoting because it increases research productivity. It is also found that a subsidy to the financial sector may have larger growth effects than a direct subsidy to research. Moreover, due to the presence of moral hazard, increasing the subsidy rate to R\&D may reduce the growth rate. I show that there exists a negative relation between the financing of innovation and the process of capital accumulation. Concerning welfare, the presence of two externalities of opposite sign steaming from financial activity may cause that the no-tax equilibrium provides an inefficient level of financial services. Thus, policies oriented to balance the effects of the two externalities will be welfare improving.

Demand- side resistance to creative destruction in schumpeterian growth theory

The Schumpelerian model of endogeno~s growlh is generalized with lhe introduction of stochastic resislance. by agenls other Ihan producers. to lhe innovations which drive growth. This causes a queue to be formcd of innovations, alrcady discovered, bUI waiting to be adopled~ A slationary stochastic equilibrium (SSE) is obtained when the queue is stable~ It is shown that in the SSE, such resistance will always reduce lhe average growth iate hut it may increa~e wclfare in certain silualions. In an example, Ihis is when innovatiuns are small anti monopoly power great. The cont1icl hetween this welfare motive for resistance and those of rent-seeking innovalors.may well explain why growth rates differ.

Why Schumpeter's Creative Destruction? Everything has changed, so it is the same: Towards "Mode 3". ACES Working Paper (Report) No. 5, 2007

Of what value is examining creative destruction and diffusion theories that Schumpeter introduced to the world? A variety of factors causes economic changes, but he argued that entrepreneurial innovation was central. Today, even those who create new products and processes hardly know who Schumpeter was, or what he did. It is difficult to believe that his contributions are not more popularly recognized today. Schumpeter's theories are as valuable and important within the contemporary environment as they were when he wrote about them over four score or seventy years ago.

Creative Destruction: Towards a Theology of Institutions

A theology of institutions is dependent upon an imagination sparked by the cross and shaped by the hope of the resurrection. Creative destruction is the institutional process of dying so that new life might flourish for the sake of others. Relying upon the institutional imagination of James K.A. Smith, the institutional particularity of David Fitch, and L. Gregory Jones’ traditioned innovation, creative destruction becomes a means of institutional discipleship. When an institution practices creative destruction, it learns to remember, imagine, and be present so that it might cultivate habits of faithful innovation. As institutions learn to take up their cross a clearer telos comes into view and collaboration across various organizations becomes possible for a greater good. Institutions that take up the practice of creative destruction can reimagine, reset, restart or resurrect themselves through a kind of dying so that new life can emerge. Creative destruction is an apologetic for an institutional way of being-in-the-world for the sake of all beings-in-the-world.

Designing Creative Destruction

This research aims to make a contribution in the context of design thinking at a global cultural scale and specifically how design methods are a feature of the homogenising and heterogenising forces of globalisation via creative destruction. Since Schumpeter’s description of economic innovation destroying the old and creating the new, a number of other interpretations of creative destruction have developed including those driving cultural evolution. However a design model showing the impact of different types of design method on cultural evolution can develop an understanding on a more systemic level from the medium to longer term impact of new designs that homogenise or increase the differences between various cultures. This research explores the theoretical terrain between creative destruction, design thinking and cybernetics in the context of exchanging cultural influences for collaborative creativity and concludes with an experiment that proposes a feedback loop between ubiquitising and differentiating design methods mediating cultural variety in creative ecosystems.

Designing Creative Destruction

This research aims to make a contribution in the context of design thinking at a global cultural scale and specifically how design methods are a feature of the homogenising and heterogenising forces of globalisation via creative destruction. Since Schumpeter’s description of economic innovation destroying the old and creating the new, a number of other interpretations of creative destruction have developed including those driving cultural evolution. However a design model showing the impact of different types of design method on cultural evolution can develop an understanding on a more systemic level from the medium to longer term impact of new designs that homogenise or increase the differences between various cultures. This research explores the theoretical terrain between creative destruction, design thinking and cybernetics in the context of exchanging cultural influences for collaborative creativity and concludes with an experiment that proposes a feedback loop between ubiquitising and differentiating design methods mediating cultural variety in creative ecosystems.

La destruction créative des paysages : les impacts spatiaux des restructurations économiques globales de l’industrie automobile à Windsor, Ontario

Dans un contexte de grandes transformations économiques imposées par la mondialisation, le développement d’innovations et la financiarisation de l’économie ont profondément atteint les villes mono industrielles de la période fordiste. L’industrie automobile, grandement influencée par les restructurations économiques globales, a elle aussi été profondément touchée. Ce faisant, les paysages urbains des villes dépendantes de cette industrie, comme Windsor en Ontario, ont été construits et détruits par le processus de destruction créative, dont nous soulignons la composante spatiale. La structure paysagère de Windsor s’est ainsi transformée : alors que des aires importantes dans différents quartiers attendent d’être réinvesties, donnant lieu aux paysages abandonnés, d’autres paysages sont créés. Cette recherche est basée sur l’étude de trois quartiers bordant la Rivière Détroit ayant subi d’importants changements dans leurs paysages. L’objectif principal de ce mémoire est donc de déterminer comment le processus de destruction créative s’opère à Windsor et quels en sont les impacts spatiaux. Afin de parvenir à cet objectif, des observations du paysage avec la création du répertoire photographique, accompagnées d’entrevues directes, ont été les méthodes privilégiées La recherche a permis de déterminer que le processus de destruction créative a lieu dans des contextes de déclin, mais également de croissance. Avec les restructurations économiques globales de l’industrie automobile, les paysages de Windsor se sont créés, déstructurés, et parfois restructurés, grâce aux interventions des acteurs locaux. Face à l’abandon progressif de certains espaces, ces acteurs ont dû réfléchir à de nouvelles stratégies en réponse aux transformations paysagères, comme le néolibéralisme urbain. Nous avons ainsi pu conclure que la destruction créative des paysages est donc en relation avec les processus économiques globaux et négociée par les acteurs locaux.

Mercado de trabalho e emprego : uma análise na perspetiva de jovens licenciados

Dissertação de Mestrado, Ciências Económicas e Empresariais, 11 de Janeiro de 2016, Universidade dos Açores.

The Labor Market Effects of Technology Shocks

We analyze the labor market effects of neutral and investment-specific technology shocks along the intensive margin (hours worked) and the extensive margin (unemployment). We characterize the dynamic response of unemployment in terms of the job separation and the job finding rate. Labor market adjustments occur along the extensive margin in response to neutral shocks, along the intensive margin in response to investment specific shocks. The job separation rate accounts for a major portion of the impact response of unemployment. Neutral shocks prompt a contemporaneous increase in unemployment because of a sharp rise in the separation rate. This is prolonged by a persistent fall in the job finding rate. Investment specific shocks rise employment and hours worked. Neutral shocks explain a substantial portion of the volatility of unemployment and output; investment specific shocks mainly explain hours worked volatility. This suggests that neutral progress is consistent with Schumpeterian creative destruction, while investment-specific progress operates as in a neoclassical growth model.

Assessing the Political Viability of Labour Market Reform: The Case of Employment Protection

We analyze the political support for employment protection legislation. Unlike my previous work on the same topic, this paper pays a lot of attention to the role of obsolescence in the growth process. In voting in favour of employment protection, incumbent employees trade off lower living standards (because employment protection maintains workers in less productive activities) against longer job duration. The support for employment protection will then depend on the value of the latter relative to the cost of the former. We highlight two key deeterminants of this trade-off: first, the workers' bargaining power, second, the economy's growth rate-more precisely its rate of creative destruction.

Schumpeterian technology shocks

We analyze the labor market effects of neutral and investment-specific technologyshocks along the intensive margin (hours worked) and the extensive margin(unemployment). We characterize the dynamic response of unemploymentin terms of the job separation and the job finding rate. Labor market adjustmentsoccur along the extensive margin in response to neutral shocks, along theintensive margin in response to investment specific shocks. The job separationrate accounts for a major portion of the impact response of unemployment. Neutralshocks prompt a contemporaneous increase in unemployment because of asharp rise in the separation rate. This is prolonged by a persistent fall in thejob finding rate. Investment specific shocks rise employment and hours worked.Neutral shocks explain a substantial portion of the volatility of unemploymentand output; investment specific shocks mainly explain hours worked volatility.This suggests that neutral progress is consistent with Schumpeterian creative destruction,while investment-specific progress operates as in a neoclassical growthmodel.

Assesing the political viability of labour market reform: The case of employment protection

We analyze the political support for employment protection legislation.Unlike my previous work on the same topic, this paper pays a lot ofattention to the role of obsolescence in the growth process.In voting in favour of employment protection, incumbent employeestrade off lower living standards (because employment protectionmaintains workers in less productive activities) against longer jobduration. The support for employment protection will then depend onthe value of the latter relative to the cost of the former. Wehighlight two key deeterminants of this trade-off: first, the workers'bargaining power, second, the economy's growth rate-more preciselyits rate of creative destruction.

The political economy of employment protection

This paper develops a model of job creation and job destruction in agrowing economy with embodied technical progress, that we use toanalyze the political support for employment protection legislationssuch as the ones that are observed in most European countries.We analyze the possibility of Condorcet cycles due to the fact thatworkers about to become unemployed prefer both an increase and areduction in firing costs over the status quo. Despite this problem, we show the existence of local, and sometimes global majority winners.In voting in favour of employment protection, incumbent employeestrade off lower living standards (because employment protectionmaintains workers in less productive activities) against longer job duration. We show that the gains from, and consequently the politicalsupport for employment protection (as defined by maximunjob tenure) are larger, the lower the rate of creative destruction and the largerthe worker's bargaining power. Numerical simulations suggest a hump-shaped response of firing costs to these variables, as well as negative impact of exogeneous turnover on employment protection.

Explaining rapid transitions in the practice of flood risk management

This article draws on empirical material to reflect on what drives rapid change in flood risk management practice, reflecting wider interest in the way that scientific practices make risk landscapes and a specific focus on extreme events as drivers of rapid change. Such events are commonly referred to as a form of creative destruction, ones that reveal both the composition of socioenvironmental assemblages and provide a creative opportunity to remake those assemblages in alternate ways, therefore rapidly changing policy and practice. Drawing on wider thinking in complexity theory, we argue that what happens between events might be as, if not more, important than the events themselves. We use two empirical examples concerned with flood risk management practice: a rapid shift in the dominant technologies used to map flood risk in the United Kingdom and an experimental approach to public participation tested in two different locations, with dramatically different consequences. Both show that the state of the socioenvironmental assemblage in which the events take place matters as much as the magnitude of the events themselves. The periods between rapid changes are not simply periods of discursive consolidation but involve the ongoing mutation of such assemblages, which could either sensitize or desensitize them to rapid change. Understanding these intervening periods matters as much as the events themselves. If events matter, it is because of the ways in which they might bring into sharp focus the coding or framing of a socioenvironmental assemblage in policy or scientific practice irrespective of whether or not those events evolve the assemblage in subtle or more radical ways.

IDEAS for Strategic Technology Management: Design of an electronically mediated scenario method

The age-old adage goes that nothing in this world lasts but change, and this generation has indeed seen changes that are unprecedented. Business managers do not have the luxury of going with the flow: they have to plan ahead, to think strategies that will meet the changing conditions, however stormy the weather seems to be. This demand raises the question of whether there is something a manager or planner can do to circumvent the eye of the storm in the future? Intuitively, one can either run on the risk of something happening without preparing, or one can try to prepare oneself. Preparing by planning for each eventuality and contingency would be impractical and prohibitively expensive, so one needs to develop foreknowledge, or foresight past the horizon of the present and the immediate future. The research mission in this study is to support strategic technology management by designing an effective and efficient scenario method to induce foresight to practicing managers. The design science framework guides this study in developing and evaluating the IDEAS method. The IDEAS method is an electronically mediated scenario method that is specifically designed to be an effective and accessible. The design is based on the state-of-the-art in scenario planning, and the product is a technology-based artifact to solve the foresight problem. This study demonstrates the utility, quality and efficacy of the artifact through a multi-method empirical evaluation study, first by experimental testing and secondly through two case studies. The construction of the artifact is rigorously documented as justification knowledge as well as the principles of form and function on the general level, and later through the description and evaluation of instantiations. This design contributes both to practice and foundation of the design. The IDEAS method contributes to the state-of-the-art in scenario planning by offering a light-weight and intuitive scenario method for resource constrained applications. Additionally, the study contributes to the foundations and methods of design by forging a clear design science framework which is followed rigorously. To summarize, the IDEAS method is offered for strategic technology management, with a confident belief that it will enable gaining foresight and aid the users to choose trajectories past the gales of creative destruction and off to a brighter future.