Innovation at the Core of Dynamism
Aug 23-2021
Edmund Phelps, 2006 Nobel laureate of economics, has just had the Chinese version of one of his books published in China. The book, Dynamism: The Values that Drive Innovation, Job Satisfaction, and Economic Growth, provides the starting point for a recent online dialogue between the author and two Chinese scholars: Prof. Justin Lin Yifu, Dean of Institute of New Structural Economics and Honorary Dean of National School of Development, both at Peking University, and Prof. Xue Lan, Dean of Schwarzman College at Tsinghua University, who moderates the talk.
The three scholars speak on the stimulating effect of innovation on social vitality. Based on his extensive research experience in China, Prof. Phelps offers some advice to China for achieving faster and more efficient innovation. A key measure, he says, is to provide students in primary and middle schools with opportunities to make discoveries and creations and also set good examples for them. To help companies get out of the shadow of the pandemic, he suggests that China improve its banking system to make the banks more willing to offer loans to companies with new ideas.
After reading Dynamism, Prof. Lin believes that China should improve its innovation policies. He agrees that innovation is a born gift in everyone, but its flourishing hinges on an environment that encourages people to put their thoughts into action. Innovation might lead to some negative consequences, including monopoly, but such consequences can be addressed when they arise. Avoiding monopoly shouldn’t take precedence over encouraging innovation.
On the issue of the propagation of innovation, Prof. Phelps commends China’s accomplishment in raising the educational level of its citizens and believes that China enjoys infinite potential for innovation provided that its people are motivated to generate new ideas. Based on the theories of new structural economics, Prof. Lin says that developing countries should import technologies suited to their development level and with due considerations to local technical adjustments.
