Wednesday, August 17, 2011

When does social reform follow the process of creative destruction?

Introduction to "Creative Destruction" term happened to me through some writings of Schumpeter during 2009. In terms of a student of "Social Science", once I got introduced to the logical reasoning process of "Creative Destruction", a realisation of noviceness creeped in. It was enhanced when I studied some other readings dealing with application of Schumpeterian thoughts in analysing innovation systems. Few readings are worth mentioning with this respect. Papers by Chris Freeman (studying the relationship between inequality, technology and economic growth), Bengt - Ake Lundvall (exploring the linkages between innovation systems and economic development) and Richard R. Nelson (assessing economic development using evolutionary economic theory) needs to be mentioned.

Now, the point is why I am mentioning about these papers. All these writers in their papers bring out a connection between innovation systems and economic development process. We all know that an economic development process is in many ways guided by social reforms and progress. Rather, these papers motivate us to think how the process of innovation systems, evolutionary economic theory (which counters neoclassical school) raises and pin points to several elements of innovation process that can be analysed to understand social reforms which underlines the development of a society around us. I will just take one activity as an indicator of social reform in this piece of write up.

Let us take the example of the entire set of activities that has been happening encircling around the anti corruption campaign of Anna Hazare. Now when I was reading about the innovation literature mainly following the writings of authors mentioned above, I thought even movements by Anna Hazare in today's context are a form of innovation in bringing changes in the processes by which social systems are operating.

These innovations are trying to constantly bring a change in the modes of operational structures of the institutions, rules that are guiding our day to day activities. Hence, I thought that why cant the integral components of innovation systems approach be applied in trying to understand these activities (Anti - Corruption Campaigns).

A major element of innovation is the presence of uncertainty associated with any activities which are integral components of innovation. Schumpeterian concept of uncertainty tells us that the actor who innovates cannot estimate the probability with which any new innovative action of his/her will bring the result for which the action was taken or originated. Here the concept of uncertainty in innovation is very similar to Frank Knight (Knight, F. {1921}, Risk, Uncertainty, and Profit (Boston:Houghton Mifflin)). Another important aspect of innovation is assimilation of new ideas leading to effective actions instead of only accumulation of new thoughts, ideas. Neoclassical school always talks of accumulation in explaining the behaviour of an economic system behaviour. But the evolutionary school of economics remind us of the importance of assimilation in changing an economy and towards the development of an economy. While reading about all these I was seeing that the anti corruption movement in India has most of these elements.

So, can we say an Anna Hazare campaign as an innovation to change the social systems as it closely follows the concept of uncertainty element of innovation as mentioned in the Schumpeterian way of explaining innovation. All these anti corruption campaign actors in many ways dont know the exact estimate of the probabilities of the success of their action. A large part of their success will also depend on how the social actors and systems assimilate these actions and implement it in their day to day actions. So it is not only about accumulation of more campaigns like these. But the success of these anti corruption campaigns as a social innovation process will depend on how much assimilation of these thoughts happen which will be measured by the effective translation of these ideas of social reforms towards implementable, practical, effective actions.

Another dimension of innovation systems is creative destruction. Schumpeter's writings on "Creative Destruction" suggests that any new innovation creates new markets where some firms loose out, become obsolete and new firms, market structure are born once they become obsolete. Technological innovation plays an important role in that dying out and birth of new firms leading to new market structures. But the question is whether a same mechanism of creative destruction will follow in the society. So analogically, a social innovation like anti corruption campaign has to destroy old corrupt institutional systems, processes and will have to give birth to new ones to maintain the analogy. The answer to these are very unknown to all of us in India at this stage. But that should not stop us from thinking about them.

So the anti corruption campaigns can be identified as a part of social innovation process as they have two traits of innovation - viz. a) role of uncertainty in innovation and b) role of assimilation in determining the success of innovation. Further they might or might not follow a process of "creative destruction" pattern of innovation systems depending on many other social, political and economic factors. It is not clear to me to what extent these anti corruption campaigns can be called as social innovation process. But after doing only little literature review on innovation systems and economic development, these overlapping areas of innovation systems in studying social systems was coming on mind. I am not yet clear about any definitive conclusion about whether anti corruption campaigns can be called as social innovation processes or not. But that doesnot stop any of us to think, write, debate and exchange more thoughts on these issues. These debates only will give a definite direction on whether we can call "Anti Corruption" campaigns or any social reform as a social innovation system process. And this will always raise one question in the minds of all those debate lovers. That question will be - "When does social reforms follow the process of creative destruction?"

Freeman, C . (2011), "Technology, inequality and economic growth", Innovation and Development, Vol.1, No.1, April 2011, pgs 11 - 24
Lundvall, B. (2011), "Notes on innovation systems and economic development", Innovation and Development, Vol.1, No.1, April 2011, pgs 25 - 38
Nelson, R. (2011), "Economic development as an evolutionary process", Innovation and Development, Vol.1, No.1, April 2011, pgs 39 - 49

No comments:

Post a Comment