Abstract
How does innovation as a systemic activity (namely, innovation systems) shape the distribution of income in contemporary societies? To address this largely under-researched, and thus also under-theorised, question, the present paper develops a novel conceptual model based on the retroductive model of explanation and by drawing empirical material from an in-depth, mixed-method case study analysis of a regional innovation system in Germany. The analysis identifies seven causal mechanisms
through which the innovation system under investigation shapes income inequality: five inequality-inducing causal mechanisms (i.e. competence concentration, concentrated-income hoarding, skill premiums, precarious employment, and old-age technological unemployment) and two inequality-reducing causal mechanisms (i.e. gender-inclusive competence-building and employment). The findings contribute to a rapidly-growing concern with rising inequality within the field of innovation studies, while also having an important policy implication: achieving inclusive innovation-driven growth requires the formation of ‘strategy synergies’ among focal actors in innovation systems.