ABSTRACT
Today neo-Schumpeterian economics has become an independent and also widely recognized research programme (e.g. Dosi et al. 1988, Fagerberg et al. 2005, Dopfer 2005 and Hanusch and Pyka 2007a) which influences considerably the design of innovation and technology policy in particular by international organizations such as the OECD (OECD 1991), the World Bank (World Bank 1999) and the European Commission. Since the mid-1990s, technology and innovation policy cannot be analysed without neo-Schumpeterian concepts such as technological clusters (e.g. Braunerhjelm and Feldman 2007), innovation networks (e.g. Pyka 2002) and entrepreneurship (e.g. Grebel et al. 2003). Until most recently, however, the innovation-orientation of the neoSchumpeterian approach is applied almost exclusively to manufacturing and service industries. In Hanusch and Pyka (2007b) we show that the innovationorientation in the industrial sector is only one prerequisite for economic growth and development. The growth success of an economy similarly depends at least on the innovation-orientation or respectively future-orientation of financial markets as well as the public sector. Economic growth and development are carried by these three pillars of economic systems which are encompassed by the bracket of true uncertainty (Knight 1921) which is inseparably connected to all kinds of innovative development processes. This intrinsic uncertainty of innovation processes is the major cause why mainstream economic approaches can be applied neither for analysing industries or financial markets, nor for the activities of the public sector when it comes to true innovation. The concept of rationality applied in neo-classical economics is not applicable in uncertain situations. The Olympic rationality of neo-classical economics leads to a pathological pessimism concerning any kind of innovation. Without a general willingness to innovate, i.e. a willingness to deal with the ex ante non predictable possibility of failure and economic losses, any innovative behaviour becomes impossible. From this, one can easily see that for an economic analysis of the potentials for growth and development of economies one cannot apply the idea of innovation to industrial sectors only. The innovation orientation has to be transferred to
the financial markets and the public sector, as well as to the important mutual influences between these three realms of economic development. By this transfer of the innovation-respectively future-orientation and the accompanying uncertainty we develop Comprehensive Neo-Schumpeterian Economics (CNSE) (Hanusch and Pyka 2007c). Only in CNSE concepts used in the theory of financial markets like venture capital or in theory of public choice like political entrepreneurship receive their original innovative meaning. The purpose of this chapter is to summarize our work (Hanusch and Pyka 2007a, 2007b, 2007c, 2007d) on the future orientation of the public sector in the CNSE approach. For this purpose we outline in Section 2 a neo-Schumpeterian theory of the public sector. In Section 3 we focus on the normative view on the public sector. Section 4 then looks at the co-evolutionary dimension. Section 5 finally applies empirically our theory to the public sectors of the European Union and their dynamics. Section 6 concludes.
