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Innovation, Economic Order and Power

Innovation, Economic Order and Power

Journal of Economic Regulation, , Vol. 9 (no. 4),

The interrelations between innovations and economic order of society are investigated. The innovative immunity of the Russian economy is stated. It is shown that the lack of innovation is a problem of economic order or institutional model of the economy, which form the structure of motivations for economic behavior. The problem that is investigated in this paper is why the economic order (institutional environment) hinders innovation activity and new technologies. Economic order is the result of the motivation of economic behavior. Economic profit plays a major role in the incentive structure. Investments, innovations, technological progress, fall into the structure of interests and motives of economic agents to the extent that they contribute to maximizing profits. The models of economic profit creation are considered. Economic returns arise either as a result of the creation of advantages in resource efficiency or as a result of asymmetries or inequalities in the distribution of power. Analyzed the problem of the dominant of the dominant profit or income in the national economy. It is shown that in the Russian economy the dominant condition for the creation of entrepreneurial income is the possession of economic power. The reason is that access to power is a relatively more affordable, profitable and cheap economic benefit for a market agent than innovation and new technologies. The result of investments in power is the formation of the "economy of power". The author reveals the negative impact of the government economy on the incentives for innovation. The crisis of the dominant model of economic order is shown. The necessity of power policy, the purpose of which is to eliminate the excess of private power as a source of income generation, is substantiated.


Keywords: innovations; profit; dominant income; economic order; economic power

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