## Competition, Innovation, and Inclusive Growth

_IMF Working Papers, March 19, 2021_

## Source details

**Canonical URL:** [Competition, Innovation, and Inclusive Growth](https://www.imf.org/en/publications/wp/issues/2021/03/19/competition-innovation-and-inclusive-growth-50269)

## Other formats

- [Markdown version](/en/publications/wp/issues/2021/03/19/competition-innovation-and-inclusive-growth-50269/index.md)
- [Structured JSON version](/en/publications/wp/issues/2021/03/19/competition-innovation-and-inclusive-growth-50269/index.json)
- [Bundle manifest](/en/publications/wp/issues/2021/03/19/competition-innovation-and-inclusive-growth-50269/bundle-manifest.json)

## Bibliographic details
- Authors: Reda Cherif, Fuad Hasanov
- Published: March 19, 2021
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781513574172.001

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### Overview
- We provide an overview of the theories and empricial evidence on the complex relationship among innovation, competition, and inclusive growth.
- Competition and innovation-led growth are critical to drive productivity gains and support broad-based growth.
- New technologies and trends in market concentration are stifling future innovation while contributing to the marked increase in inequality.
- Beyond consumer welfare in a narrow market, competition policy should adapt to this new reality by considering the spillover and dynamic effects of market power, especially on firm entry, innovation, and inequality.
- Innovation policies should tackle not only government failures but also market failures.

### Key findings and themes
- Competition and innovation-led growth drive productivity gains and support broad-based growth.
- New technologies and trends in market concentration:
  - are stifling future innovation;
  - contribute to the marked increase in inequality.
- Market power has spillover and dynamic effects on:
  - firm entry;
  - innovation;
  - inequality.
- Innovation policy should address both:
  - government failures;
  - market failures.

### Policy implications and recommendations
- Competition policy should:
  - move beyond focusing solely on consumer welfare in a narrow market;
  - consider spillover and dynamic effects of market power on entry, innovation, and inequality.
- Innovation policy should:
  - tackle not only government failures but also market failures.

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## Content in this bundle

- **Working Paper**
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  - [Working Paper (PDF)](/-/media/files/publications/wp/2021/english/wpiea2021080-print-pdf.pdf){rel="external" type="application/pdf"}

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_Source: https://www.imf.org/en/publications/wp/issues/2021/03/19/competition-innovation-and-inclusive-growth-50269_