Hello Comrades, I hope you are doing well today.
I would like to ask what is the relation between entrepreneurship and innovation in the economy, and in terms of what a company itself may develop—from a Marxist perspective. Also, what influences the leaders of companies to make decisions related to or bolstering innovation?
This is related to coursework in a Chinese university, so the more detailed the better!
Innovation serves growth which is a long term profit maximization. Once the company has defeated competition for the foreseeable future, it switches short term profit maximization (gouging prices, squeezing labor, planned obsolescence, squeezing suppliers). Once a monopoly or cartel has risen in a certain sector, innovation is usually ignored if not gutted, since there’s no reason to spend resources boosting long term growth.
Once bank capital and industrial capital merge in the monopoly mode of production, entrepreneurship is basically a servant of finance capital. Today this takes the form of Venture Capital where innovative companies are indebted to if not owned by large trusts of finance capital. The goal of entrepreneurship becomes not one of growth, but creating property to sell to a VC firm which is itself owned by numerous investment firms like BlackRock.
Otherwise natural forms of innovation occur when a problem needs to be solved, or a current process can be cheapened through efficiency gains. Capital will select only the profitable innovations.