Harvard Kennedy School, Cambridge MA
Harvard professor calls on developing world, development institutions to revisit, apply proven economic formula stressing innovation, entrepreneurialism
Influential economic ideas first advanced in 1911 — stressing innovation and entrepreneurialism as the fundamental generators of growth and wealth — were deemed inappropriate for developing countries, stunting progress in many parts of the world throughout the 20th century, says a distinguished Harvard academic.
In a newly-published paper, Calestous Juma of the Harvard Kennedy School’s Belfer Centre for Science and International Affairs calls on emerging economy countries and development agencies to revisit and adopt ideas rejected in the 1950s by “pessimistic” architects of early international development policies and institutions.
Prof. Juma’s paper examines the impact of Joseph Schumpeter, an Austrian-born Harvard scholar ranked among the world’s most influential economists, whose 1911 book, The Theory of Economic Development, advanced the notion that innovation and individual entrepreneurship are the dynamic foundations of a nation’s economic evolution, that “creative destruction” and the renewal of tools and processes within an economy continuously refreshes the system and results in rising prosperity.
His then ground-breaking ideas inspired innovation-led economic policies in industrialized countries but were dismissed as irrelevant to developing countries as policies and programs took shape within fledgling institutions in the 1950s such as the United Nations, World Bank and International Monetary Fund.
According to Prof. Juma, “pessimism” prevailed in early development economics, resulting in an emphasis on “the use of basic or ‘appropriate technologies,’ central planning, role of bureaucracies as sources of economic stability, and food aid” for developing nations, rather than innovation, entrepreneurship and industrial development.
Appearing in a new journal, Policy and Complex Systems, Prof. Juma notes that after a decade of debate the architects of development economics rejected innovation-oriented policies and adopted “static, linear, and incremental view of economic change” for the newly independent countries.
News release in full, click here
Example coverage:
Voice of America, “Poor Countries Denied Chance to Succeed?” click here
Xinhua News Agency (China), “Kenyan scholar roots for innovation to reactivate progress,” click here
News from Africa, “Embrace Innovations, African countries urged” click here
SciDev.net, click here
Agencia EFE (Spain), Spanish, “Estudio analiza los obstáculos que Latinoamérica sufrió para su desarrollo,” click here; Portuguese, “Estudo analisa obstáculos que América Latina sofreu para desenvolvimento” click here
Coverage summary, click here