The Innovation and Diffusion Podcast S3 E4: Product vs Process Innovations, Firm Growth, and Political Connections with Salomé Baslandze (Federal Reserve Bank of Atlanta)
Feb 25, 2026
Salomé Baslandze, a research economist at the Federal Reserve Bank of Atlanta who studies innovation and firm dynamics. She discusses product versus process innovations, how foundational process patents differ from cost-reducing ones, which firms and ecosystems create big process shifts, firm growth and political connections, and the challenges they pose for competition and policy.
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Early Life Shaped Her Interest In Growth
- Salomé Baslandze grew up in Georgia during post-Soviet transitions and the Rose Revolution, which sparked her interest in why some countries prosper and others stagnate.
- Her PhD at Penn, influenced by Ufuk Akcigit and Jeremy Greenwood, shifted her focus toward firm dynamics, innovation, and growth models.
Use AI To Complement Research, Not Replace Creativity
- Treat AI as a complement for many research tasks, not an immediate substitute for creative work: use it to speed coding, data scraping, and routine tasks.
- Keep focusing on creative questions, modeling, and big-picture thinking where AI currently lacks replacement power.
Foundational Process Innovations Expand Possibilities
- Product innovations create new goods while process innovations change how goods are produced, but many studies treat innovation as homogeneous rather than distinguishing types.
- Baslandze defines a new subtype: foundational process innovations that expand what firms can produce, unlike routine cost-cutting process changes.