Does consumerism drive innovation?

I'm researching a paper on western consumerism. Prior to the 1920's, people were thrifty and saved. Neoclassical economics says that saving is good (leads to capital investment and thus growth). Post-1920's, people borrowed to consume -- and much of the consumption was economically useless (entertainment and toy-like goods).





Yet, consumer economies thrive. I'm trying to describe why.





I believe the answer lies in endogenous growth theory (Romer, etc) -- while an economy based on sales of video games and CGI films may be pretty flimsly in itself, it represents investments in IT research. In fact, virtually all consumer goods and services are built on substantial R%26amp;D.





New growth theory says that innovation drives growth. I say that consumerism drives innovation.





Is anyone aware of journal articles that also make this connection -- where an economy of silly toys and games will outperform one based on capital investment?

Does consumerism drive innovation?
i can't help you to any serious academic lengths.





i agree with you that consumerism is good for a system in the sense that it stimulates growth. it helps it thrive, enhances production, innovation, r %26amp; d.





but, i'd like to remind you that 2 things stand out. first, for it to be benefitial to r %26amp; d, it needs to be based on goods produced within the economy.





additionally, consumerism in the extreme, has a detrimental effect of leading to high borrowing, overspending, trade deficit, and inflation.
Reply:I think it is group consumerism or corporate consumption that drives development. Ways of using waste from another food production in another are needed by corporations to make more and more with less and less. Food now is part artificial. Feed is part artificial. A better mouse trap is lost. We are so buried in new products that if one is there we will never see it. Only mass advertising points to the new profitable products. Now when it comes to the whole country needing innovation it does happen. The economy of a global society is going to be more complicated than it is today. There is magic and hell in economics now. So I guess need is still the mother of invention.