policymakers demonstrate

30 Philippe Aghion and Ufuk Akcigit
We should emphasize right away that this chapter is opinionated in the sense
that it reflects our own biases and uses the lenses of our own work. However,
the reader should feel free (and is welcome) to disagree and take issue with the
models, analyses and statements outlaid in the next sections. Our main purpose
is indeed to encourage debates and criticisms and to inspire future work on the
subject, in particular contributions that involve creative destruction of our own
work.
In particular, we will propose some answers to questions such as:
1. Why do we need competition policy for innovation-led growth?
2. How does growth relate to firm dynamics and the size distribution of firms?
3. Does growth increase or reduce unemployment?
4. What distinguishes innovation-led growth from other types of growth?
What are the main drivers of innovation-led growth?
5. How can macroeconomic policy help sustain innovation-based growth?
Should we oppose structural reforms and the need for (more flexible)
macroeconomic policy to enhance innovation-led growth?
6. What is the relationship between innovation-led growth, inequality and
social mobility?
7. Should this relationship lead us to dispense with patent protection: in other
words, should we oppose patent protection and competition as potential
drivers of innovation-led growth? Similarly, should the need for competition
policy lead us to reject any form of sectoral (or industrial) policy?
8. How should we reform the welfare state in order to facilitate innovation-led
growth?
9. Should governments subsidize R&D to foster innovation-led growth: is
such government intervention necessary or sufficient?
10. What are the limits to patenting and intellectual property and why do we
need academic freedom and openness?
The remaining part of this chapter will be organized as follows. Section
1.2 will succinctly present the main growth paradigms. Section 1.3 will
present some of the main distinctive predictions of the Schumpeterian growth
paradigm. Section 1.4 will discuss growth policy design in advanced countries.
Section 1.5 will talk about technological waves and will touch upon the debate
on secular stagnation. Section 1.6 will provide Schumpeterian insights into the
design of R&D policy. Section 1.7 will analyse the role for openness and freedom
in a multistage process of innovation. Section 1.8 will build on the policy
discussion in this survey to revisit the issue of how to bring Europe back into a
high growth path. Finally Section 1.9 will conclude the survey.
1.2 Looking for Growth Paradigms to Think about Growth Policy
Today’s research on growth economics, with its double objective of improving
our understanding of the growth process and of helping us think more