Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/69738
Authors: 
Hartmann, Dominik
Pyka, Andreas
Year of Publication: 
2013
Series/Report no.: 
FZID Discussion Papers 65-2013
Abstract: 
In this paper we bridge a gap between innovation economics and the human development approach by analyzing positive and negative effects of different types of economic diversification on social welfare. Economic variety is a driver and outcome of economic development. However, diversification leads to ambiguous effects on the well-being of human agents: on the one hand, increasing variety augments the freedom of human agents to choose. On the other hand, it can overburden their capabilities to make economic decisions and can deteriorate their well-being. It becomes clear that human development policy has to go hand in hand with an industrial policy that promotes qualitative economic diversification. Depending on its dynamics, this diversification can be achieved via related and unrelated variety. We can expect a better design of development policies from a better understanding of the co-evolutionary development of variety, freedom of choice and well-being.
Subjects: 
innovation
economic diversification
human development
JEL: 
O10
O54
E11
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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