National Growth as a Result of Research and Development Expenditures

Economic growth requires the creation of new products and services for sale that develops new financial revenue streams. Creative works contribute to economic growth by allowing for solutions to market problems and effective consumer utility. On a national scale research and development can increase the gross national product of entire nations. 

The first step in understanding economic development is the production of creative works. Creative works can be defined as a systematic approach to increase the stock of knowledge that contributes to man, culture and society by developing new applications (OECD, 1993). Such creative works are then further developed to make consumer products. 

The human capacity to innovate has an impact on productivity growth (Porter and Stern, 2000). This productivity growth is based on the intellectual capital within R& D projects and available national knowledge stock. As investments are moved into R&D, it is the human capacity that develops creative works from available information to solve market problems. 

Research by Guloglu and Tekin (2012) studied the relationships among R&D, innovation and economic growth in the countries of Australia, Canada, Finland, France, Germany, Italy, Japan, Korea, Netherlands, Portugal, Spain, United Kingdom and the United States.  R&D expenditures, patents and Gross National Product were considered important factors in the research in order to determine how each influences the other. A Granger-Causality Testing Methodology was used to analyze the results. 

Results: 

-There are positive relationships between R&D and innovation, R&D and economic growth, and economic growth with innovation. 

-R&D cause technological change and this technological change causes economic growth. 

-Causality relations between R& D and technology may also work in reverse. 

-Support for the Schumpeterian view that R&D sectors generate innovation and enhance rates of growth in the economy.

-Support that inventive activity and innovation are pro-cyclical. 

Analysis:

The development of national wealth is a result of the capacity to use human capital to engage in R&D projects that can be used to develop creative works and enhance GNP. Organizations contribute uniquely to the development of their nation by developing products and services that create higher levels of revenue that make their way into the economy. Through synergistic R&D developments and knowledge sharing national positions on the global market can be enhanced.

Author: Dr. Murad Abel

Guloglu, B. and Tekin, R. (2012). A panel causality analysis of the relationship among research and development, innovation and economic growth in high-income OECD countries. Eurasian Economic Review, 2 (1).

OECD (1993). The measurement of scientific and technological activities: Proposed standard practice for surveys of research and experimental development (Frascati Manual).Paris:OECD

Porter, M. and Stern, S. (2000). Measuring the ‘ideas’ production function: Evidence from international patent output. NBER Working Paper, 7891.

Do Abusive Managers Destroy Employee Creative Motivation?

Employees often complain about the personal impact of abusive behavior by management and how this impacts their daily productivity. New research helps highlight how abusive behavior can impact creativity in the workplace and lower the ability of employees to contribute to problem solving within an organization. Understanding how abusive mindsets are contagious in the workplace is important for understanding how to develop workplaces that push for higher levels of employee performance.

The skill of leadership is important in businesses that seek to overcome their next market challenge and make their way to the top. Transformational leadership is positively associated with creative performance (Shin & Zhou, 2003). Leaders who inspire and give a proper path are more pragmatic in their performances and therefore lead to higher levels of employee creative contributions.

The reason why leadership can have such an impact on organizations is because of the way they perceive their employees. Those leaders who label additional effort by employees as citizenship behavior versus ingratiation view and reward their employees at a higher level (Eastman, 1994).  Leaders and managers create precisely the type of behaviors they view their employee with. A leader or manager who perceives employees as lazy, unproductive, and ignorant are likely to create employees who mimic this behavior.

If the very leaders on the top view employees in such a negative way the belief system will pass down through the layers of managers and impact how employees behave and view themselves. Findings help highlight how there is a cascading effect of leadership whereby middle-level managers are a pivotal psychological link between leaders and frontline workers (Zohar & Luria, 2005). The mannerisms and perceptions of leadership filters throughout the entire organization and management is the connecting point of passing these perceptions onto employees to prime behavioral expectations.

When these expectations are in a negative light the overall performance of employees is damaged. Particularly their willingness to engage in and solve problems is hampered and this lowers future growth prospects of the firm. Creativity is about free thinking, problem solving, and sharing those perspectives with others to create new economic realities. Employees have no incentive to do this if their ideas are automatically discounted due to poor management perception.

Research by Liu, Liao & Loi (2012) was conducted in a large Midwestern automobile company and had 22 departments, 108 teams and 762 employees participate in the study. The study attempted to determine the impact of abusive leadership and abusive management on worker creativity. It also analyzed the concept of cascading layers of management and how this impacts performance expectations and transference of beliefs.

Results:

-Abusive supervision by top management creates likelihood that middle level managers will also be more abusive and this damages creativity. 

-How employees perceive the reasons (two perceptions) for this abuse can either exacerbate or mitigate its effectiveness.

-Departmental leadership abusive behavior has an impact on team leader behaviors (cascading layers of management) which impacts team member behavior.

Analysis: 

The report supports attribution theory that indicates that employee characteristics and team leader characteristics interact and influence the environment. Furthermore, the research also supports social learning theory by indicating that group behaviors and organizational culture are formed by these unique attributes. Employees learn to accept their station in life or resist against such poor treatment. To change poor behavior within an organization is to ensure you have a leader with transformational skills, proper management training, and strong employee attributes.

Eastman, K. (1994). In the eyes of the beholder: an attributional approach to ingratiation and organizational citizenship behavior. Academy of Management, 37: 1379-1391

Liu, D., Liao, H. & Loi, R. (2012). The dark side of leadership: a three-level of investigation of cascading effective of abusive supervision on employee creativity. Academy of Management Journal, 55 (5). 

Shin, S. & Zhou, J. (2003). Transformational leadership, conservation, and creativity: Evidence from Korea.  Academy af Management Journal, 46: 703-714.

Zohar, D., & Luria, G. (2005). A multilevel model of safety climate: Gross-level relationships between organization and group-level climates. Journal of Applied Psychology, 90: 616-628.