Directing innovation towards just outcomes: the role of principles and politics

ABSTRACT

Contemporary innovation theorists tend to defend a combination of Schumpeterian and Keynesian politics of innovation as a solution to the problem of the directionality of new technologies. Their hope is that the Schumpeterian motor of innovation would keep entrepreneurs incentivised to take market opportunities and the Keynesian state would invest in infrastructure, redistributing risks and rewards. In contrast, Hayekian theorists of innovation insist that state interventions aiming at directionality suffer from epistemological and moral problems. For them, politics of innovation ought to abandon the idea of directionality altogether because it is morally questionable and creates disincentives for taking up new risky ventures. Instead, the politics of innovation ought to be restricted to promoting an institutional environment that is conducive to entrepreneurship. I will argue that despite differences, both theoretical camps rely on liberal notions of morality and politics which justify predominantly distributional currencies of justice, overlooking questions of relational equality in innovation.

KEYWORDS:

• Directionality
• innovation
• entrepreneurship
• social justice
• relational equality

Acknowledgements

This paper was first presented at the international workshop Critiquing the Direction for Innovation – The role of justice and Exnovation that took place at the University of Montreal, Canada in 13–14 April 2023. I am indebted to the organisers of this event, Rafael Ziegler and Lukas Fuchs, as well as the participants, for their constructive comments. The two anonymous reviewers of TJRI should be also acknowledged for their suggestions.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 For example, as one REPE reviewer of this article has pointed out to me (and I would like to thank him/her for the contribution), many Hayekians support redistributive policies where everybody gets access to some level of income and public service. In this sense, they contradict the ideal of catallaxy as a spontaneous order that peacefully delivers benefits to everyone without the need of state intervention. Similarly, Keynesians support pro-market policies of free competition and limited welfare state in order to allow for incentives of entrepreneurial activity.

2 Having said that, it needs to be kept in mind that, in his 1930 essay Economic Possibilities for our Grandchildren, Keynes (1932) outlined some general ends of the capitalist innovation process. Although he remained optimistic about technological development as the outcome of this process, he was concerned about technological unemployment as an economic problem.

3 In addition, one might also argue that receiving rewards from innovation does not guarantee people would be equally capable of leading the kind of life they value. Sen (2009) would object the idea of justice in innovation as reciprocity on the grounds that it does not enable everyone contributing to the innovation process to freely choose his/her functionings.

4 Mises argued that socialism relies on a central economic planning that is impossible due to suppression of market pricing that can lead to calculation chaos.

5 Certainly, these notions of morality and politics are exclusive in the sense that they leave out several liberal theorists. For example, they leave out theorists such as Sen and Nussbaum who explicitly reject the ideal of justice as reciprocity and instead argue for equality of basic human capabilities.

Additional information

Notes on contributors

Theo Papaioannou

Theo Papaioannou is the director of the Innogen Institute (Open University and University of Edinburgh) and a professor of Politics, Innovation and Development at the Open University. He is the author of Inclusive Innovation for Development: Meeting the Demands of Justice through Public Action (Routledge, 2018). Theo has published extensively in the areas of innovation and development policy.