2018-2019 / ECON2275-1

Economics of Innovation

Duration

30h Th

Number of credits

 Master in economics : general (120 ECTS)5 crédits 
 Master in business engineering (120 ECTS)4 crédits 
 Master in economics : general (60 ECTS)5 crédits 

Lecturer

Lionel Artige

Language(s) of instruction

English language

Organisation and examination

Teaching in the second semester

Schedule

Schedule online

Units courses prerequisite and corequisite

Prerequisite or corequisite units are presented within each program

Learning unit contents

Technological innovations are changing the economic system in which we live. These innovations have, to a large extent, a cultural origin. Western societies, in particular, value the curiosity and creativity of individuals who foster the emergence of new ideas and their materializations. But this cultural stimulation would not be enough if the competitive organisation of economic activities did not make innovation a condition, often necessary and not always sufficient, for the survival of companies on markets regulated by authorities guaranteeing competition.
From a collective point of view, the virtues that Western culture lends to creativity and innovation are founded. Innovations enable more or less essential needs to be met at lower cost and new solutions to unresolved or old problems to be solved more efficiently. Nevertheless, while innovation can generally be seen as positive overall, it almost inevitably leads to winners and losers. Innovation creates activities and jobs while destroying them. However, the businesses and jobs created are not the same as those destroyed. This phenomenon was called "destructive creation" by the economist Joseph Schumpeter. Moreover, innovation can have negative consequences for health and the environment that are not always predictable and are sometimes very costly.
From an individual point of view, the cultural conditioning of Western societies allows everyone to flourish by giving free rein to this cognitive capacity of the human being to create and innovate. However, society's appreciation of creativity creates stress. It is no longer enough for an employee to do his job well to ensure his job but to propose new solutions that will allow the company to survive the competition of the markets. As Steve Jobs said, "It doesn't make sense to hire smart people to tell them what to do. We hire them to tell us what to do. In other words, it is up to the employee to create his own job. This evolution has two major consequences:
1/ The stress of the "creator's block" of even the most creative individuals because it is not enough to press a button to have a creative idea. It is necessary to be able to develop this creative faculty as one can develop a muscle.
2/ the initial and continuing training of individuals must no longer focus solely on the acquisition of known scientific and technical knowledge but also on their ability to develop new knowledge and skills.

Learning outcomes of the learning unit

This course has two objectives:
1/ The first objective is to analyse creativity and innovation succinctly and in a multidimensional way (historical, cognitive and economic). This will involve defining, measuring and trying to explain the causes and individual and social consequences of innovation.
2/ The second objective is to develop the capacity of each student to create collectively. This learning will therefore take place in groups. Students will have to learn how to make their group live in order to develop a process of collective creativity.
 

Prerequisite knowledge and skills

Introduction to economics
Intellectual curiosity
All the knowledge in economics and management acquired during the years of study at HEC
Taste for teamwork
 

Planned learning activities and teaching methods

The course activities will be of three kinds:
1/ Professor's presentation on creativity and innovation.
2/ Group work (in class and outside the classroom).  The enterprise is one of the main circles of collective creativity. Our goal is to create the same environment in the classroom without the financial constraints of the real business world. Groups will be formed and each group will develop a creative project. The emphasis will be on creativity rather than on the technical or financial feasibility of the project. Nevertheless, each group will need to do a rigorous market analysis to assess the probability of commercial success of their innovation. This market analysis will be based on the knowledge in economics and management learned during the studies at HEC. 

The theme of this group work: sustainable development. Human overpopulation and the excessive exploitation of non-renewable resources pose a deadly danger to all life on the planet. Innovation is one of the important cognitive resources of the human species to avert this danger. Students will need to imagine creative projects to solve today's and tomorrow's environmental problems.
3/ Written personal reflection and criticism of the group's collective creativity process and self-evaluation of the student's participation within the group and within this process.
 

Mode of delivery (face-to-face ; distance-learning)

Due to group work, participation in the course is essential. Absences will have to be justified, otherwise they will be punished.

Recommended or required readings

G. M. Peter Swann (2009) The Economics of Innovation: An Introduction, Edward Elgar.
 

Assessment methods and criteria

Multiple-choice questionnaires (individual grade),
5-10 page report on the creative project (collective grade)
Video pitch of the creative project (collective grade)
One-page report on the creative process (individual grade)
Evaluation (mandatory) of the participation of group members by each member (individual evaluation). Free-riding behaviour will be heavily punished.
 

Work placement(s)

Organizational remarks

Attendance to classes is essential

Contacts

Professor : Lionel Artige, Office I.53 Tel. : 04/366 4891 E-Mail : Lionel.Artige@uliege.be