Product Innovation and Economic Growth Part IV: Demand changes in an aging society (Japanese)

Hiroshi Yoshikawa and Koichi Ando

Discussion Papers (Japanese) from Research Institute of Economy, Trade and Industry (RIETI)

Abstract: Under a declining population, the engine for economic growth is regarded as broadly defined technical progress or innovation. We demonstrate that the production of goods always follows logistic growth. This simple fact results from the saturation of demand for any existing goods and services. This indicates that the growth rate of an advanced economy will eventually fall to zero unless new goods and services are introduced to the market; namely, product innovation is paramount to economic growth. The role of product innovation is not fully captured by the endogenous growth literature which emphasizes the importance of innovation. We present two case studies—hybrid cars and disposable diapers for the aged—to demonstrate the significance of product innovation.

Pages: 23 pages
Date: 2015-03
New Economics Papers: this item is included in nep-age and nep-ino
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Persistent link: https://EconPapers.repec.org/RePEc:eti:rdpsjp:15012

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