Part I.  Why and where other analyses fall short.

Because Economics has been unable to solve its 'quality change problem'  - that is it has no methods for calculating how good a good or service is - and because that is exactly what is needed to embrace innovation, industry has had to solve this problem independently. Our decades long genesis has produced a fundamental equation that uses economic and market data to enumerate the performance of a product or service, as perceived by its end - user at point of purchase - including all the rational and irrational (including those related to well - being) surrounding that purchase (without having to identify each one). This macroscope not only connects innovation mathematically to economic growth, but also to societal well - being and quality of life; whose enumeration is collateral to solving the quality change problem.

Business advances when more profitable goods and services substitute for existing ones, and this is driven by innovation in firms fighting to increase profit eroded by competition. 'Creative Destruction' is the term introduced by Joseph Schumpeter to describe its most extreme form, although 'Creative Construction' might better describe the entrepreneurial activity of many new market entrants. TechMatt™ Business Innovation Analysis makes this numeric and equates the innovative microeconomic growth of firms to macroeconomic growth of the economy, with mathematical precision in a four-link chain between product innovation spending and GDP. All factors of productivity are accounted for, leaving no gaps (thereby eliminating the 'measure of ignorance' label attached to the gap now known as 'total factor productivity' but known as the 'residual' in 1956, when the charge was made).

For the pathways by which the economic performance in firms leads to the economic growth of a nation click here

Part II. The breadth of the new analysis.

This original synthesis is useful  for managing innovation in new ways, not only in individual firms but also in public policy, where it rethinks GDP beyond passive enumeration to active stimulation. It applies to all sectors of the economy - agriculture, mining, construction, manufacturing, services and government and its striking numeric connection between GDP and innovation spending nuances and retires the 'R&D investment' cliche, to provide a rigorous new scientific platform for innovation spending advocacy.

Part III. Policy implications.

The applied science of Business Innovation Analysis shows that to globalize, without negatively impacting national economic prosperity, there is optimal policy. It requires ways to (a) increase the performance of domestically produced goods and services commensurate with negative balance of trade (according to a specific new constitutive macroeconomic equation, below) and to (b) separate R from D, and investment from spending - in R&D, in order to (c) 'globalize investment in R' but 'localize spending on D', whose magnitude for effectiveness can be estimated by graphical extrapolation of current innovation productivity here This provides the first ever estimation method for determining how much should be spent on innovation to secure a projected GDP.