Innovation without growth? Exploring the (in)dependency of innovation on economic growth

For more than a decade, advocates of both green growth and degrowth have argued about the role of economic growth for the transformation towards a societal system that ensures social well-being on a global scale without transgressing planetary boundaries. Given that such a transformation needs innovations of various kinds, this article explores the question of how dependent innovation is on economic growth and what effects a potential long-term economic stagnation or decline may have on innovation processes and systems. We approach the subject from different angles using mixed methods. First, we present a quantitative analysis of the linkages between economic growth and innovation activities on a sectoral level, based on data of the Community Innovation Survey (CIS) for Germany. Here, we find two sectors (petroleum and advertising industries) showing negative growth rates but still a higher than average share of innovative enterprises. Subsequently, we present an in-depth qualitative case study of the international pharmaceutical sector, which allows us to include a qualitative evaluation dimension. Here, we investigate different innovation approaches and find that both the amount of capital needed to finance research and development activities and the added health benefit of novel drugs vary greatly. We finally conclude that economic growth is not a necessary condition for all kinds of innovation and reflect on some implications for innovation policy. If in a post-growth era financial resources are limited, a shift to less capital-intensive types of innovation and a concentration on innovations which address prioritised societal or ecological needs seem feasible.