Innovation systems and income inequality: in search of causal mechanisms

Fragkandreas, Thanos (2021) Innovation systems and income inequality: in search of causal mechanisms. Working Paper. Birkbeck, University of London, London, UK.

Abstract

How does innovation as a collective (multi-actor) activity shape the distribution of income in contemporary societies? To address this largely under-researched, and thus also under-theorised, question, the present paper develops a novel conceptual model based on a synthesis of the literature on innovation systems, relational inequality theory, and critical realist causal mechanisms theory. Drawing upon an in-depth, mixed-method case study analysis, this paper demonstrates how the strategies of focal actors (e.g., firms, universities, research institutes, policy organisations) combine with the causal abilities of the innovation system under investigation to form seven causalmechanisms of (in)equality: five inequality-inducing causal mechanisms (competence concentration, income hoarding, skill premiums, precarious employment, and old-age technological unemployment) and two inequality-reducing causal mechanisms (genderinclusive competence-building and employment). The findings contribute to, among other issues, a rapidly-growing concern with the question of rising inequality within the field of innovation studies, while also having an important policy implication: achieving inclusive growth through innovation requires, among other things, the formation of ‘strategy synergies’ among focal (triplehelix) actors in innovation systems.

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