Proposals for innovation

Abstract

In the previous chapter, it was claimed that many of the difficulties which Western countries face, are the result of inadequate or distorted patterns of innovation. If each of these difficulties is analysed individually, it will be clearly seen how much the innovation factor contributes to it, and when they are all added up, the indictment is a damning one. It is because we can no longer carry out B-phase innovation as well as the Japanese, that we are losing ground in export markets and are seeing our home markets penetrated increasingly by their products. To the extent that we were slow to innovate in the energy field, we left ourselves similarly at the mercy of the OPEC cartel. The resultant OPEC surpluses, recycled through the international money markets, have been an irresistable temptation to politicians who have elections to win. Whatever chance these might have had of resisting the lure of external borrowing under ‘normal’ conditions, they had none at all of doing so under the combined pressures of Japanese capability, greatly increased energy prices and the salesmen of the international Banks. The resulting major acceleration in the rate of growth of the public sector reduced Western productive and innovative capacity still further, making the crushing effect of the external forces still more devastating. Since democracy itself depends upon a substantial proportion of economic life being independent of the State apparatus, this public sector growth has lessened the capacity of democratic systems to survive.