This is Paul Adamson and I'm in conversation with Frederick Erickson.

Frederick Erickson is the director of the think tank, the European Centre of International

Political Economy, ESAIP.

Frederick, we're here to talk about your new book.

Have you written with Bjorn Weigel, The Innovation Illusion, or How So Little is Created by So Many, Working So Hard. You said in the past on this topic, Western capitalism has lost its mojo. What do you mean by that?

Well, a number of things. I mean, first of all, if we look at Western economies, and by Western

economies, I mean Western Europe, North America, the type of economies that really are at the

frontier of new technology, innovation, productivity, etc., many of those have lost their taste for growth over the past 40, 50 years.

So what we are doing in the book is trying to document a longer-term trend with falling growth

in GDP per capita in virtually all these economies, a falling trend of productivity growth, where in a region like Europe you have

effectively shaved off roughly one percentage point of productivity growth per decade since the 1970s.

We have seen that companies are investing a smaller share of the total revenues, that their

expenditures on real R&D as share of their expenditures have also gone down. And what we're

trying to do is to link back this sort of dreary economic trend to behavior in the corporate world where companies have

become even more addicted to predictability, a world which is predictable, where they cannot

sort of make investments in innovation or other forms of investments that may pay off in

10 or 15 years time because

that future is too unpredictable. They have owners, investment institutions that demand that

they need to deliver returns in two or three years, not in 10 or 15 years. So the corporate

world has become less engaged in trying to shape the future

of economies with innovation, real innovations and with other forms of economic behavior that

raises investments, productivity growth and at the end of it, GDP per capita in the Western

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