|Innovations, Institutions and Economic Performance|
December 30, 2004
|From L to R: Prof. Edmund S. Phelps, McVickar Professor of Political Economy, Columbia University, Mr. Nitin Desai, Honorary Professor, ICRIER and Dr. Arvind Virmani, Director & Chief Executive, ICRIER, at the lecture.
ICRIER organised a public lecture by Professor Edmund S. Phelps, McVickar Professor of Political Economy, Columbia University on ‘Innovations, Institutions and Economic Performance’. Professor Phelps’s talk stressed on the impact of institutions on innovativeness in the economy, which has an impact on productivity, which in turn raises wages thus widening peoples’ choices of careers and goods.
Even further, innovations as he went on to explain, helped generate change and mental stimulation for people in their work. To assess the effectiveness of the institutions, his research looked at three levels of innovational activity: adoption of innovations; adaptation for domestic use; and origination. The implication: how much dynamism an economy has depends on the presence of institutions that facilitate and motivate adoption and adaptation – and origination in exceptional cases. Professor Phelps suggested that as India is now said to be in the catch up period as was Europe in the 50’s and 60’s, drawing lessons for India from Europe would be useful. According to him, institutions like company law and corporate governance rules and financial devices like stock exchanges and corporate bond markets could be expected to foster innovation.
The lecture was attended by experts from research institutes, scholars, and senior officials from the Ministry of Finance, Ministry of Commerce, and Planning Commission. Mr. Nitin Desai, Honorary Professor, ICRIER chaired the lecture.