Innovation Is the Lifeblood of an Economy

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The author argues that innovation is life blood of an economy, not only for job satisfaction, but also for the number of jobs. He says once companies stop being innovative, then they don't need as many people. Once the economy is growing more slowly, then a wealth piles up relative to wages because wages are not growing as fast any more. People are retiring earlier andd fewer people, and more people are taking time out to do other things.

Edmund Phelps of Columbia University, Nobel Laureate in economics, and author of Mass Flourishing talks with EconTalk host Russ Roberts about the ideas in the book. Phelps argues that human flourishing requires challenges, struggles, and success and goes beyond material prosperity. He argues that in recent decades, policy has discouraged innovation and mass flourishing resulting in a slow-down in growth rates. Phelps emphasizes the non-material benefits of economic growth and the importance of small innovations over big inventions as key to that growth.