1.Explain how our ability to do process and product innovation might be impacted
ID: 1210689 • Letter: 1
Question
1.Explain how our ability to do process and product innovation might be impacted by a slow growth / no growth economy, and what we can do about the problem.
a. How is innovation impacted during times of slow growth or no growth?
b. May have to consider what is required to actually deliver innovations to the market.
2. Explain how the optimal level of R & D spending is computed.
a. Feel free to use graphs to support your explanation.
b. Don’t forget to let him know that returns are expected, not guaranteed.
Explanation / Answer
the most distinctive features of innovation in the highly industrialized economies.
There are only two ways of increasing the output of the economy: (1) you can increase the number of inputs that go into the productive process, or (2) you can think of new ways in which you can get more output from the same number of inputs.
Most economists think that technological innovation must have been a major force in the growth of output in highly industrialised economies.
The first reason is that the conduct of R&D in the high tech sectors of any economies has become hugely expensive. The second reason is that the outcome of this R&D spending is fraught with financial risks that derive from a variety of sources. Hence a high growth economy will facilitate innovation
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