Competition, Innovation, and Inclusive Growth

Author: Philippe Aghion, Reda Cherif, and Fuad Hasanov

Volume/Issue: Volume 2021 Issue 080

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Topics covered in this book

This title contains information about the following subjects. Click on a subject if you would like to see other titles with the same subjects.

Finance , Economics- Macroeconomics , Economics / General , International - Economics , Inequality , inclusive growth , competition , market power , innovation , Big Tech , rise of market power , growth policy , firm markup , superstar firm , panel data , Income inequality , Income , Productivity , Sub-Saharan Africa , laggard firm , market concentration , frontier firm , state intervention , firms enter , innovation policy , competition policy , productivity gain

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Summary

We provide an overview of the theories and empricial evidence on the complex relationship among innovation, competition, and inclusive growth. Competition and innovation-led growth are critical to drive productivity gains and support broad-based growth. However, new technologies and trends in market concentration are stifling future innovation while contributing to the marked increase in inequality. Beyond consumer welfare in a narrow market, competition policy should adapt to this new reality by considering the spillover and dynamic effects of market power, especially on firm entry, innovation, and inequality. Innovation policies should tackle not only government failures but also market failures.