Can IT Innovation become a Tool against Fiscal Crisis?: Findings from Europe

Can IT Innovation become a Tool against Fiscal Crisis?: Findings from Europe

Leonidas G. Anthopoulos (Business School, Technological Education Institute of Thessaly, Thessaly, Greece) and Panagiotis Siozos (Department of Computer Science, Aristotle University, Thessaloniki, Greece)
DOI: 10.4018/ijpada.2015010103
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Abstract

Economic recession has expanded during the last five years from U.S.A. to Europe and sprawls at an international level. Governments try to redefine their strategies and policies in order to recognize and deal with this unexpected environment, while they prioritize alternative methods in order to return to growth and to control national and supranational economics. Some of these strategic changes emphasize on innovation and research as the means to overcome this recession. The aim of this paper is to question and illustrate the connection between innovation and fiscal growth and in this order to explore whether Governments can capitalize innovation against fiscal crisis. Emphasis will be given on Information Technology (IT) innovation initiatives that are being undertataken with these updated strategies. Literature findings depict such an interconnection, while findings from the latest European strategies are compared to data from other countries regarding innovation's capitalization against fiscal recession and national downturn.
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2. It Innovation And Fiscal Growth

The first question that this paper seeks to answer sounds trivial or obvious, while it can be considered “cliché to say so” (Lederman, 2010). However, it is important for innovation to be defined in economic terms and its relation with fiscal growth to be identified by policy makers. Schumpeter (1949) was the first scholar who discussed about innovation with economic terms during the decade of 30s and defines it as “opportunity identification, ideation or invention to development, prototyping, production marketing and sales, while entrepreneurship only needs to involve commercialization”. Moreover, Ettlie (2006) describes innovation as “invention capitalization”, while Porter (2003) commercializes innovation, aligns it to entrepreneurship’s strategic and competitive context, and positions it to the top level of national competitiveness. Innovation has to do more than technology; it deals with management systems that drive growth. Drucker (1985) defines innovation as “the action that endows resources with a new capacity to create wealth”. For example, in the beginning of the nineteenth century harvesting machines were not affordable to the farmers. Eventually one of the many harvesting-machine inventors, Cyrus McCormick, invented installment buying. This enabled the farmer to buy a harvesting machine with future earnings.

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