Building self-renewal capacity for future growth and adaptation

• Journal: Global Academic Society Journal: Social Science Insight, Vol. 2, No. 7, year 2009, pp. 16-40.
• Author(s): Toni Saarivirta
• Category: Social Science Insight III
• Keywords: self-renewal capacity, growth theories, evolutionary economics, regional development, localised technological knowledge, collective knowledge

Abstract

This paper adopts the point of view that a crisis will face a person, organisation, region or country at some point in their life span or history. The question is how to prepare for the crises and recover from them afterwards? Some of us recover better than others and in a shorter time. The concept of self-renewal capacity will be introduced here as an idea in finding ways for future development. Three economic theories: neoclassical and endogenous growth theories, and evolutionary economics based theory are used here as reference points in search of self-renewal capacity. The results show that endogenous growth theory gives more room for self-renewal capacity than does neoclassical growth theory, but, nonetheless, several questions, such as the dynamic of economies, remain unsolved. Evolutionary theory, however, fits most eminently when defining the concept. Self-renewal capacity starts clearly from an individual level learning processes and grows in time, to consider firms, organisations, institutes and regions. Exploitation, exploration, absorption, integration and leadership, together with social capital, are at the core of self-renewal capacity. Together with localised technological knowledge and collective knowledge, self-renewal capacity can combine bottom-up and top-down approaches.