Policy decisions are shaped by policy makers’ conceptualization of development. Development is a value based and normative concept, and accordingly, there are various approaches to it. Science is the key to the creation of wealth in a "national economic development appr
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Policy decisions are shaped by policy makers’ conceptualization of development. Development is a value based and normative concept, and accordingly, there are various approaches to it. Science is the key to the creation of wealth in a "national economic development approach". Therefore, policy makers invest on human and social capital as valuable assets. Firms are important because they could cause growth and wealth. According to the literature in this field, there is a positive correlation between innovation and inequality. It means that inequality will increase by increasing innovation. But the wealth derived from innovation can later be used to reduce that inequality. In contrast, the concern for "human development approach" is improving human quality of life, and speaks about Pro-poor, Para-poor, and Per-poor innovations. Some economists argue about development as freedom and improvement of people capabilities. The concern for "capability approach" is improving human opportunities, eliminating inequalities, and achieving justice. Freedom and capability are prerequisites for people creativity. Because of the paradoxes in different development approaches mentioned above, in this article the relationship between innovation and inequality is examined and a negative correlation is found. Less social and human capabilities has resulted in less innovation and more inequalities in various dimensions. Therefore, a greater emphasis on enhancing human capabilities is recommended in policy making efforts.
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