How to Invent and Protect Your Invention: A Guide to Patents for Scientists and Engineers

13.5 THE INNOVATION AND JOB CREATION RELATIONSHIP

Innovation is also recognized as a pathway to job creation. Jobs are available to those who produce value that is recognized by those who are willing to pay for the value. Transactions occur as “value” of comparable worth is exchanged. Thus, an employment agreement (transaction) happens when (1) the cost of acquisition (cost of recruiting, salary, startup, operation to support) is equal to or less than the perceived value of the benefit (the employee's knowledge and services) and (2) the service (or product) is provided at a more favorable price than that provided by similar providers. As a result, productivity (producing goods or services valued by others) becomes the key to job creation and retention. It is based on the basic economic premise of equal value exchange. If I produce value to you such as providing food, then you will provide value back to me with whatever you have that I value, for example, tutoring. Society has developed money (currency) as an innovation that acts as a common representation of value. Money is accepted as payment for goods or services because the receiver knows that she can use it to purchase other goods or services, or invest the money to receive additional value.