On Innovation and Economic Growth

Dr. Huub Meijers’ session about innovation and economic growth was extremely interesting for me”, says Bart Bongers, Director at Youz. “Huub showed for instance that, on average, wellbeing increases with the growth of GDP. The paradox is that the demand for mental health care – the sector I work in – has increased enormously, especially in rich countries. How is that possible? The big challenge is to keep mental health affordable and for that we need innovation.

 

Bart Bongers (45) lives in both Germany and the Netherlands. Youz is part of Parnassia, the biggest mental health care provider in the Netherlands. He is one of 28 students following Huub Meijers’ session, part of the On-Campus MBA module International Business Environment, colloquially called ‘the economics week’. During the week students focus on the most important economic challenges corporations, households and governments, Europe and the world are faced with. Key questions Huub Meijers’ session addresses are why some countries are rich and other poor, the factors determining national income and production in the long term, the main determinants of (lack of) growth, convergence or divergence in different parts of the world and the way governments can promote growth. To be able to understand and answer these questions, Huub Meijers kicks off with providing the students with a toolbox of economic concepts such as micro versus macro economy, long versus short term, GDP (Gross Domestic Product) versus GNI (Gross National Income).

About Dr. Huub Meijers

Dr. Huub Meijers is an associate professor of economics at the School of Business and Economics of Maastricht University. Previously he was researcher at UNU-Merit. Huub Meijers research topics include the diffusion of new technologies at a macro-economic level, the impact of technology on the labour market, the impact of information and communication technologies on trade and growth, economic modelling in a Stock Flow Consistent framework with a focus on monetary policy.

 

Solow Growth Model

The session was very interactive. After being immersed with theory, students worked in small groups on assignments, after which lively plenary discussions followed. After the break Meijers brought the theory of economic growth and technology to the table. Besides adding new concepts to the basic toolbox, he introduced the Solow Growth model of economic growth, a model used to explain the economic growth of a country. The model states that economic growth is created by labour (employees), capital (machines etc.) and technological development. Investments in capital and labour lead to economic growth, however not infinitely. Critics state that Solow’s model is not realistic though, as it regards technology and innovation as ‘manna from heaven’. In reality technology and innovation demand investments on research and development, education and knowledge structures, open trade, finance, high production standards, a solid government and strong social values.

Key takeaway

Bart Bongers: “Huub Meijers provided me with many valuable insights, of great interest for my current work. It’s been debated for years now, that the number of people using mental health care should go down. The care is simply not affordable anymore and additional spending cuts have been announced. The hard thing in mental health care though, is that it is hard to diagnose. A mental disorder can’t be x-rayed, so we can never be 100% certain, despite several instruments to provide evidence. Because of that, it is difficult to get absolute treatments and the right amount of money to provide the care and meanwhile initiate innovative projects to cut numbers and improve care. Huub’s session made me realise, that if we want to bring the numbers down and achieve savings goals, we first need financial space to innovate and get technology to do it’s ‘magic’. Current developments with AI can be promising in this regard.”

 

 

This article displays the student insights and experiences of our On-Campus MBA International Business Environment module. Our On-Campus track has an on campus learning format and is part of the executive modular part-time MaastrichtMBA programme. The programme has a Triple Crown accreditation and is aimed for professionals with at least 5 years of working experience.

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