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The Role of Commercialization Competence in Endogenous Economic Growth
ERMES, Paris 2-University, Paris, France.
KTH. Ratio Institute, Stockholm, Sweden.
METU, Ankara, Türkiye.
2024 (English)In: International Journal of Microsimulation, E-ISSN 1747-5864, Vol. 17, no 2, p. 297-323Article in journal (Refereed) Published
Abstract [en]

While innovation supply is creative, unpredictable, and not necessarily related to future economic usefulness, resource provision is focused on economic returns, experience based and narrower, implying a positive economic risk of not understanding innovative commercial winners. We demonstrate through simulation experiments on an economy wide firm-based model that industrial growth is explained by industrially competent identification and financial support of winners that are carried on to industrial scale production and distribution. The simulations capture the dynamic economic systems effects on the entire economy, from micro responses to macro and the feedback on micro behaviour of expectational mistakes. Competence bloc theory is used to model the supply of innovations and their commercialization in what we call an Experimentally Organized Economy. We demonstrate that lack of commercialization competence, notably industrial competence embodied in venture capitalists´ ability to identify, select and finance radically new innovations breaks the conventionally assumed linearity between innovation supply and economic growth. We also demonstrate the existence of long-term and possibly very large losses in output from the loss of winners during the commercial filtering of the competence bloc, and that the economy wide costs incurred by protecting losers may be large.

Place, publisher, year, edition, pages
International Microsimulation Association , 2024. Vol. 17, no 2, p. 297-323
Keywords [en]
Commercialization, Dynamic Efficiency, Economic Growth, New Economy, New Firm Formation, Venture Capitalist Industrial Competence
National Category
Economics Economic History Business Administration
Identifiers
URN: urn:nbn:se:kth:diva-357933DOI: 10.34196/ijm.00300Scopus ID: 2-s2.0-85211318662OAI: oai:DiVA.org:kth-357933DiVA, id: diva2:1922640
Note

QC 20241219

Available from: 2024-12-19 Created: 2024-12-19 Last updated: 2024-12-19Bibliographically approved

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Eliasson, Gunnar

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CiteExportLink to record
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  • apa
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