Innovation and growth in resource-based economies

One of the striking features of the economics of both development and growth, both in the mainstream and its self-styled heterodox alternatives, is a resolute failure to take account of some key empirical and historical characteristics of the world we live in. The major problem seems to be an inability to look clearly at the structures of production and learning that actually characterise growing economies. This failure takes two forms. On the one hand there is an approach, popular in treasuries and finance ministries, that conducts economic analysis at a highly aggregated level. This in effect erases industries and sectors by treating the economy as a one-sector operation that produces one output (an output that is labelled 'GDP'). On the other hand, there is a sectoral and industrial approach that focuses on a small number of industries and technologies that are held to 'drive' economic growth.