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The risk-reward nexus in the innovation-inequality relationship: who takes the risks? Who gets the rewards?

Lazonick, W; Mazzucato, M; (2013) The risk-reward nexus in the innovation-inequality relationship: who takes the risks? Who gets the rewards? Industrial and Corporate Change , 22 (4) pp. 1093-1128. 10.1093/icc/dtt019. Green open access

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Abstract

We present a framework, called the Risk-Reward Nexus, to study the relationship between innovation and inequality. We ask the following question: What types of economic actors (workers, taxpayers, shareholders) make contributions of effort and money to the innovation process for the sake of future, inherently uncertain, returns? Are these the same types of economic actors who are able to appropriate returns from the innovation process if and when they appear? That is, who takes the risks and who gets the rewards? We argue that it is the collective, cumulative, and uncertain characteristics of the innovation process that make this disconnect between risks and rewards possible. We conclude by sketching out key policy implications of the Risk-Reward Nexus approach.

Type: Article
Title: The risk-reward nexus in the innovation-inequality relationship: who takes the risks? Who gets the rewards?
Open access status: An open access version is available from UCL Discovery
DOI: 10.1093/icc/dtt019
Publisher version: https://doi.org/10.1093/icc/dtt019
Language: English
Additional information: This version is the author accepted manuscript. For information on re-use, please refer to the publisher’s terms and conditions.
Keywords: Innovation, risks, rewards, growth, inequality.
UCL classification: UCL
UCL > Provost and Vice Provost Offices > UCL BEAMS
UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of the Built Environment
UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of the Built Environment > Inst for Innovation and Public Purpose
URI: https://discovery.ucl.ac.uk/id/eprint/1553088
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