| Abstract: |
This work prepared for B. Hall and N. Rosenberg (eds.) Handbook of Innovation,
Elsevier (2010), lays out the basic premises of this research and review and
integrate much of what has been learned on the processes of technological
evolution, their main features and their effects on the evolution of
industries. First, we map and integrate the various pieces of evidence
concerning the nature and structure of technological knowledge the sources of
novel opportunities, the dynamics through which they are tapped and the
revealed outcomes in terms of advances in production techniques and product
characteristics. Explicit recognition of the evolutionary manners through
which technological change proceed has also profound implications for the way
economists theorize about and analyze a number of topics central to the
discipline. One is the theory of the firm in industries where technological
and organizational innovation is important. Indeed a large literature has
grown up on this topic, addressing the nature of the technological and
organizational capabilities which business firms embody and the ways they
evolve over time. Another domain concerns the nature of competition in such
industries, wherein innovation and diffusion affect growth and survival
probabilities of heterogeneous firms, and, relatedly, the determinants of
industrial structure. The processes of knowledge accumulation and diffusion
involve winners and losers, changing distributions of competitive abilities
across different firms, and, with that, changing industrial structures. Both
the sector-specific characteristics of technologies and their degrees of
maturity over their life cycles influence the patterns of industrial
organization ? including of course size distributions, degrees of
concentration, relative importance of incumbents and entrants, etc. This is
the second set of topics which we address. Finally, in the conclusions, we
briefly flag some fundamental aspects of economic growth and development as an
innovation driven evolutionary process. |
| Keywords: |
Innovation, Technological paradigms, Technological regimes and trajectories, Evolution, Learning, Capability-based theories of the firm, Selection, Industrial dynamics, Emergent properties, Endogenous growth |