Innovative economy is a type of economy where profit is created not through material production and not through concentration of financial centers. An innovative economy allows generating a surplus flow of innovations, constantly setting higher standards in technological competition. An innovative economy ensures worldwide economic supremacy of the country implementing it.
Replacement of capitals
Replacement of capitals occurs at every stage of an innovation process. The government finances fundamental science through scientific grants, investments in the innovative infrastructure. This attracts various scientific teams that compete to get funding for various research and development projects. The objective of the second stage is to generate a surplus of innovative ideas with the understanding that the majority of them will not succeed, but this creates conditions for replacement of capital. Patents and inventions are acquired by private firms whose shares are bought by investors in the hopes of generating super profits. In this way, an innovative economy receives a fresh influx of funding not from the government, but from private investors.
Surplus and competition
As soon as development reaches the next level, innovative companies grow to a state where they become attractive to larger corporations, innovative and venture funds and other organizations. In this way, even before future solutions are brought to the stage of experimental prototypes the market is heated up, international investors are attracted along with production companies that buy new solutions based on which they will be able to launch new technological products. For instance, Intel has announced that by 2015 it will create a computer based on nanotechnologies. In doing so, it ensures that its stocks are growing in value already today. At the end of the process we see capital replacement by the end user of products which contain a variety of solutions about which the consumer knows only what's revealed in advertising. In this case nobody finances the entire chain from the scientific concept to the final product.
Capital replacement occurs in several markets simultaneously. At each subsequent stage of the innovative process, replacement occurs with an every greater benefit. An innovative economy is built on the fact that so far nonexistent solutions or ideas, most of which do not have a practical value in and of themselves, are already laying the groundwork of new markets for innovative products. Replacement of capitals occurs several times.
An innovative economy implies a surplus of agents at each stage of the innovative process: a surplus of knowledge, ideas, solutions, patents, companies, entrepreneurs, infrastructures. There is a difference between innovative economy and implementation chain: science - R&D - production - consumer. An innovative economy implies simultaneous growth of various market types, which can be ensured if there are various surpluses. A surplus of scientific discoveries and ideas is initiated regardless of whether they will ever reach production or consumer. Regardless of this, stimulation of the formation of various development companies occurs. This is happening as a result of construction of centers for collective use of scientific equipment, technology parks, special tax zones, preferences, and subsidies. Simultaneously there should be a surplus of financial institutions involved in the innovative economy, so all investors would compete for buying shares of startups.
Initiation of new markets
An innovative economy is built through forming new markets. In the new markets of ideas, solutions, intellectual property, innovative products, old economic structures are dismantled and transformed into new quality. As a separate market, there is a market of various new organizational forms for companies and structures in an innovative economy: such organizational forms as technology parks at universities, corporate learning centers, small business clusters, business incubators for innovative companies, technology transfer centers at research institutes, special trading sites for the innovative sphere.