Page 7 - HKUST IEMS Spring 2018 Newsletter

20 CHALLENGES FOR INNOVATION POLICY STUDIES

Now that the field of innovation studies is fifty years old, the occasion incremental process than
has been marked by several studies looking back to identify the radical. The tendency
main advances made over its lifetime. In his academic seminar, Ben to prefer measurable
Martin (University of Sussex) looked at a list of 20 advances over the and traditional forms of
field’s history, which include a move from the notion of individual innovation has also led
entrepreneurs to corporate innovation activities and a shift from laissez to a neglect of financial
faire to government intervention. Martin then set out 20 challenges for innovations which has
the coming decade. This intention was not to issue a prescriptive list, the potential to contribute
but rather, to prompt a debate within the innovation studies community to the latest economic
on what are, or should be, the key challenges to take up, and more crisis, the growing
generally on what sort of field the community aspires to become. polarity between rich and
poor and the potential to shift and restructure economics to a new
He argued that the focus of empirical studies has failed to keep pace paradigm. In spite of significant poverty reduction achievements in
with the fast changing world and economy, especially the shift from China and in other emerging markets, Martin cited billions that are yet
manufacturing to services and the increasingly urgent need for to benefit from economic and innovation development. This poses
sustainability rather than just economic growth, as well as the need for a challenge for the innovation studies community to develop the
innovations that diminish rather than exacerbate inequality. Moreover, conceptual, methodological and analytical tools to study the shift to
the very way that researchers conceptualise, define, operationalise innovation for sustainable development through appropriate policies.
and analyse ‘innovation’ may be too rooted in the past, leaving them
less able to grapple with other less visible or ‘dark’ forms of innovation Academic Seminar, “20 Challenges for
be it in the area of services or in organizational or non-technological Innovation Policy Studies” by Ben Martin
forms. Martin argued that indicators used to measure traditional (University of Sussex) on 2017.10.12
forms of innovation are now missing much of the innovative activity Video available at
that occurs not in the form of manufactured product innovations, http://iems.ust.hk/martin
involve little formal R&D, are not patented and involve a more

FINANCIAL INCLUSION AND OUTPUT VOLATILITY

Achieving greater development and subsequent economic growth operates
financial inclusion is very differently across regions, countries and levels of income,
a key policy priority suggesting that the relationship between financial inclusion
for many emerging and output volatility is non-linear.
markets, but output
volatility is also a Gopalan's research reveals that financial inclusion amplifies
central concern output volatility in a consistent fashion. His research demonstrates
for policymakers that financial inclusion is positive and highly statistically and
specifically to insulate economically significant. Whilst there was no significant interaction
the economy from between financial inclusion and a more stable banking system
shocks or to smooth fluctuations, which in turn could on output volatility, results showed that higher financial inclusion
adversely affect the most vulnerable in society. If financial amplified output volatility only in the lower and lower-middle
inclusion policies can affect output volatility, how do we income countries. The impact of financial inclusion remains
reconcile the two, and what do policy makers have to statistically insignificant in the upper middle/high income
consider when thinking about financial inclusion? countries.

In his IEMS Academic Seminar, Sasidaran Gopalan (Lee Kuan Financial inclusion must be undertaken in the presence of strong
Yew School of Public Policy, National University of Singapore) prudential regulatory frameworks, where the banking system is
explored the extent to which financial inclusion mitigates or stable and not too fragmented, failing which volatility will be much
amplifies macroeconomic volatility using data from 1995-2013 greater.
of 103 emerging markets and developing economies (EMDEs)
at different levels of economic development. Academic Seminar, “Financial Inclusion
and Output Volatility: An Empirical
Financial sector development has been established as Investigation” by Sasidaran Gopalan (Lee
important for economic growth and as is the case with most Kuan Yew School of Public Policy, National
macro-development issues, heterogeneity must be factored University of Singapore) on 2017.10.27
in. Gopalan emphasizes that the link between financial sector Video available at http://iems.ust.hk/gopalan

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