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The Innovation Illusion: How So Little Is Created by So Many Working So Hard
Fredrik Erixon and Björn Weigel


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Format: Hardcover, 312pp.
ISBN: 9780300217407
Publisher: Yale University Press
Publication Date: November 22, 2016

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Description and Reviews
From The Publisher:

Timely, compelling, and certain to be controversial—a deeply researched study that reveals how companies and policy makers are hindering innovation-led growth

Conventional wisdom holds that Western economies are on the threshold of fast-and-furious technological development. Fredrik Erixon and Bjorn Weigel refute this idea, bringing together a vast array of data and case studies to tell a very different story.

With expertise spanning academia and the business world, Erixon and Weigel illustrate how innovation is being hampered by existing government regulations and corporate practices. Capitalism, they argue, has lost its mojo. Assessing the experiences of global companies, including Nokia, Uber, IBM, and Apple, the authors explore three key themes: declining economic dynamism in Western economies; growing corporate reluctance to contest markets and innovate; and excessive regulation limiting the diffusion of innovation. At a time of low growth, high unemployment, and increasing income inequality, innovation-led growth is more necessary than ever. This book unequivocally details the obstacles hindering our future prosperity.



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Today's hidebound capitalism is throttling not just the west’s economic growth, but even the aspirations of its people. If dynamism is to be regained, argues this thought-provoking book, we must reject the rentier capitalism that masquerades as the real thing. This argument for a more dynamic market economy is not just challenging; it is also of huge importance.
—Martin Wolf, Financial Times


Economic stagnation afflicts the developed world, and the puzzle of slow productivity growth is the leading economic question of our age. Erixon and Weigel have developed a profoundly original and multi-faceted explanation rooted in the dead weight of corporate bureaucracy, with its striving for short-term profits and avoidance of risk, as well as government-created regulatory complexity and policy uncertainty. The book is concise, lively, full of examples, and deeply researched from sources that span economics and management science.
—Robert J. Gordon, Stanley G. Harris Professor in the Social Sciences, Northwestern University, and author of 'The Rise and Fall of American Growth'


Innovation is the life blood of the modern economy and our economies seem to be a litre or two short. This highly accessible book argues convincingly that the problems we are having with R&D is not the ‘R’ part, it is the ‘D’ part. We are not lacking invention, we are lacking the policy and competitive environment needed to turn new science into new, economically useful product and processes. This is an important and insightful read for all those concerned by big-picture economic problems.
—Richard Baldwin, President of CEPR, Founder & Editor-in-Chief of VoxEU.org, Professor of International Economics, Graduate Institute, Geneva


“Erixon and Weigel know how to make their case seductive and entertaining. They describe the four horsemen of capitalist decline riding down innovation before it has any chance of reaching the wider world… liberally sprinkled with colourful examples… nourished with statistics… The book is eloquent in laying out its thesis.”
—Peggy Hollinger, Financial Times


 
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About the Authors

Fredrik Erixon is the director and cofounder of the European Centre for International Political Economy (ECIPE), an international economics think tank based in Brussels. Björn Weigel is a business strategist and investor/entrepreneur with extensive experience in working with innovative companies and start-ups. He began his career as a management consultant for Booz Allen Hamilton. They both live in Sweden.



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