The Relationship between Microeconomics and Freakonomics Radio Episodes

The Relationship between Microeconomics and Freakonomics Radio Episodes

Freakonomics Radio Podcast is a radio podcast that tells about things that people think they already know and things that people never knew they are important to know but are vital in their lives. The main focus of this essay is to examine the relationship between the microeconomics and the Freakonomics Radio Podcast episodes. In this case, I choose episode 399 with the theme, Honey, I Grew the Economy.

The main discussion of this episode revolved around creativity and innovation. The episode reveals that innovation experts have been overlooked for a long time in the areas where innovation happens regularly (Dubner, 2019). The episodes also argue that innovations are not only done in labs and companies but start from individual thinking and then presented in labs and companies for testing their applicability. Erick Von Hippel says that acknowledging this reality will be a very very good move in the economy and also to the innovators. Hippel also elaborates on the process of innovation as aided by the existence of other things. “People start riding bikes down mountains, and then they modify bikes so that they can ride down mountains more easily,” said Hippel (Dubner, 2019). He argues that they can modify the bikes by installing stronger brakes and any other necessary thing, which will make riding down mountains more safe and enjoyable. He continues to argue that manufacturing companies can discourage innovation. They fail to install some things in their product and wait until the customers prove that it’s possible to make the product they are.

This episode also shows the power of home innovation. For example, Lisa Lane reports that the ideas of the Rinseroo product came when she was relaxed at her beach house with messy showers and messy dogs. Mark Terrill also invented an internet-connected barbecue smoke controlled so that he could spend Saturday afternoons with his friends instead of spending the time monitoring the barbecue manually. Additionally, the episode reveals that some innovations originate from the virtue of duty. “… We had a house in New Hampshire, and my job was to cut up firewood. So, of course, I made an automated device,” said von Hippel (Dubner, 2019). This attests to the saying necessity is the mother of invention.

This episode is related to microeconomics. It reveals the role of innovation in business. Many companies that produce different commodities use the stepped-by- step innovation process, as discussed by Eric Von Hippel. For instance, the Coca Cola Company is now marketing the new product, Coca Cola with zero sugar. This is just a modification of the ingredient used to make the old brand. The process is important in the development of companies because it helps in correcting the mistakes in producing the previous product. Home-based innovation has also been of great help in microeconomics. One of the key roles of an entrepreneur is the innovative role (The World Bank Group 2020). Many entrepreneurs make innovations when relaxed at their homes and apply their ideas or sell the idea to fellow entrepreneurs who produce related products. Home innovation can also be a source of business opportunity. For instance, the invention made by Von Hippel, he could employ the idea of producing similar firewood cutting machines for sale.

In conclusion, from the above discussion, it is found that there is a close relationship between the episode and microeconomics. Innovation plays a very important role in microeconomics because it helps a business survive in a competitive market.

References

The World Bank Group (2020). Innovation and Entrepreneurship (Online) Available at            https://www.worldbank.org/en/topic/innovation-entrepreneurship

(Accessed: March 1, 2020)

Dubner, J.S., (2019). Ep. 399: Honey, I Grew the Economy. (Audio file) Retrieved from                          https://freakonomics.com/podcast/home-innovation/