Introduction

It's only very recently that the field of economics (and policy) has rediscovered development and/or evolutionary economics as an important area of research. According to the pioneering work of Schumpeter, innovation can be seen as a driving force for economic development and growth. Schumpeter's second important (and often neglected) cornerstone is financial capital. The innovator needs financial capital for the new combination of given resources from the outside, made available from the bank system in the form of credit. Schumpeter uses the static equilibrium as a reference point. To move beyond static equilibrium, dynamic skills in the sphere of financial and monetary systems as well as in the realm of public and private goods are necessary. Therefore the credit-drawing bank system and the value-drawing entrepreneur system must be counterparts. In addition, Schumpeter used the term capital– in contrast to the dominant neoclassical opinion – in a balance sheet-oriented sense as ‘financial capital’. Interestingly enough, Ragnar Nurkse, the best known Estonian economist, dedicated his scientific work (e.g., his books, Problems of Capital Formation in Underdeveloped ([1953] 1960) and Countries and Equilibrium and Growth in the World Economy (1962)) to very similar topics by referring to Schumpeter partly.