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A New Taxonomy of Economic sectors With a View to Policy Implications

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Abstract

This paper is an attempt to tease out a taxonomy of economic sectors based on a systems approach to innovation and economic growth that may be useful for policy analysis. The taxonomy explored here revolves around novel products rather than ethereal knowledge-producing entities. This insight goes back to Allyn Young (1928) and Joseph Schumpeter (1934) who argued that the introduction of new goods was the engine of economic growth. More precisely, our taxonomy of sectors focuses on novel products which are efficiency-enhancing within and between sectors through the market mechanism. The scheme revolves around the relationship between 'Enabling' and 'Recipient' sectors (which gives the taxonomy its name: ER), and offers a lens for viewing and interpreting a substantive part of the mechanics of modern economic growth. The last part of the paper briefly discusses a few immediate policy implications, although it has the potential for greater use and value in this regard.

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  • Eduardo Pol & Peter Carroll & Paul Robertson, 2001. "A New Taxonomy of Economic sectors With a View to Policy Implications," Economics Working Papers WP01-01, School of Economics, University of Wollongong, NSW, Australia.
    • Handle: RePEc:uow:depec1:wp01-01
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    More about this item

    Keywords

    innovation; economic growth; enabling linkages approach; knowledge-based economies; novel products; efficiency-enhancing innovations;
    All these keywords.

    JEL classification:

    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

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