Blade Runner economics: Will innovation lead the economic recovery?

According to Schumpeterian theories, economic expansions are associated with the introduction of successful new products, processes and services while depressions are linked to stagnant periods with few innovations. Can the economic crisis set in motion in 2008 be explained by the inability to innovate and upgrade production? And, conversely, will an economic recovery require a new stream of innovations? Drawing on the debate which emerged after the 1970s economic crisis, this discussion paper tries to assess whether it is likely that the next long-term expansion will be linked to a new stream of innovations. While most evidence suggests that ICTs continue to provide the back-bone of economic activities, there is the prospect that biotechnology will eventually start to fulfil the promise envisaged over 30 years ago in the film Blade Runner.