DIRECT AND NON-LINEAR INNOVATION EFFECTS OFDEMOGRAPHIC SHIFTS

Abstract

Among these pressures, demographic shifts seem to boostinnovation, as the public sector responds to the arrivalof migrants and to community changes in race and eth-nic composition. However, we know little about innova-tion by governments in response to expected populationdecline. In particular, studies have under-examined howanticipated demographic pressures prompt public organiza-tions to innovate. This study undertakes this task by argu-ing that innovation is more visible in municipalities fac-ing greater anticipated demographic decline. However, wealso argue for a non-linear relationship in which too strongand/or too weak expected demographic declines lead to lessvisible innovation (inverted U-shape effect). These proposi-tions were tested with a data set of Japanese municipalitiesand employing a dose–response model. Findings show thatanticipated demographic declines directly boost innovationvisibility. However, too strong and/or too weak unexpecteddemographic declines make innovation less visible.