A trans-Keynesian vision of innovation for the contemporary economic crisis: ‘picking winners’ revisited

We argue that the current economic crisis is a fault line in the transition from an industrial to a knowledge-based society and is thus potentially subject to a different set of dynamics than previous crises, like the Great Depression of the 1930s, which occurred within an existing mode of production. A qualitatively different response is needed to address the current downturn: one that puts in place new drivers for long-term knowledge-based economic renewal and growth. Keynesian methods, are no longer sufficient. Large-scale targeted government intervention in the innovation system and support to knowledge-based firms, technologies, products and services are required to compensate for declining innovation support from the private sector and boost economic growth. ‘Picking winners’ approaches that proved successful during World War II and afterwards need to be revisited, to hasten recovery from the current economic crisis and manage the transition to a knowledge-based regime. Copyright , Beech Tree Publishing.