Innovation economist unpacks the recipe for big ideas
Innovation. From boardrooms to classrooms to pundits in the media, you hear the buzzword everywhere nowadays. But what does it really mean and why do so many politicians and business leaders believe innovation is the key to prosperity and economic growth?
Murat Celik, an assistant professor in the Department of Economics who recently joined the Faculty of Arts & Science, has some ideas. Celik explores topics such as the market for ideas, openness to disruption, creative innovations, patents as economic collateral and agents of technical change, and the misallocation of talent in innovation.
He spoke with A&S News to share some of what he’s learned.
How does your work make the connections between innovative thinking and economic prosperity?
I am interested in economic growth that is fueled by new and disruptive ideas. My research focuses on the innovative people and companies who come up with these ideas, and how these ideas are allocated within the economy, and transformed into practical applications, which can range from smartphones and easy-to-use apps to new electro-surgery techniques and cheap and effective drugs. Given that new ideas can and do improve our quality of life substantially, it is important to understand their creation process so that we can discover policies and initiatives which can boost the rate at which we come up with innovations as a society.
How will you teach these principles of economic growth through innovation to students at U of T?
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I teach macroeconomic theory, which examines among other topics the big-picture long-term factors that impact economic growth. The course makes engaging with students beyond the classroom quite easy, since all the economic events they live through or read about in the news outlets or social media can be related to what they learn in class. I discuss with them new economic developments in the world as we experience them, and point them towards news articles which they can analyze better, thanks to the theoretical tools developed in the classroom.
You subscribe to the concept of a “market for ideas,” and it’s been said that Canada is shifting to an emphasis on a creative economy, and one of innovation. How much can a region or even a whole nation rely on the production of innovative ideas for economic growth?
It is not unreasonable to believe that specialization in innovative ideas can be relied on for economic growth at a regional or national level, especially in the case of Canada. The economics of innovation is a very hot topic, and there is ongoing research that highlights several important aspects of this process.
One important factor that is well-documented is that the majority of the new ideas generated in the world originate from very small geographical areas — what we call “tech hubs.” This is because innovation is not something best done in isolation, but a team effort where many different ideas are combined into a new one. Toronto is already considered to be one of the top 20 tech hubs worldwide, along with Vancouver and Montreal.
I believe the life quality and culture in these places, coupled with the attractive immigration system of Canada, will continue to draw more and more existing or future inventors, scientists and entrepreneurs, and give them a chance to challenge Silicon Valley in terms of innovative output. Such activity naturally spills over to other areas of the local economy, and would lead to an overall increase in economic growth.
Can universities and other educational efforts do anything specifically to foster one’s ability to come up with innovative ideas that will spur economic growth?
I think the answer is yes, but it is difficult to describe how in a tangible way. Although establishing a causal relationship is hard, we know that more than two thirds of inventors who patent their ideas have a professional or graduate degree on top of college education. Encouraging participation in these programs either through mentoring students or providing more fellowships and cheaper loans would certainly help.
Increasing the number of class activities and assignments which require teamwork would also help, since innovation requires a lot of human interaction and exchange of ideas. Diversity is also key as people from different cultures and backgrounds are usually able to generate ideas that could not have been achieved as easily with a more homogeneous group of people.
The same idea applies to cross-disciplinary interactions, and I believe the universities must strongly encourage – or perhaps even require – students to take classes from different fields. Some of the most disruptive innovations are usually the product of people from different disciplines coming together to produce some new product or method that they could not have come up with on their own in isolation.
Why did you choose to come to U of T?
There are many reasons that make U of T one of the greatest places at which to be. Academically, it is one of the best universities not just in Canada, but in the world. It is also lucky to boast of many renowned economists with whom I share close research interests.
But beyond these factors, the vibrancy of the city of Toronto was very appealing. It is one of the most diverse and fast-growing cities in the world, drawing in a lot of young, talented people, and this is reflected in the students and academics U of T attracts.
My research and teaching benefit from interacting with people with different ideas and ways of thinking, and Toronto’s demographics and allure make these much more easier to improve than most other cities. Toronto was chosen as the best city to live in by The Economist in 2015, and I certainly agree with this conclusion.