1,721,017 research outputs found
Innovation and demand in industry dynamics: R&D, new products and profits
No full textThe links between three interconnected elements of the Schumpeterian sources of economic change are explored, conceptually and empirically, and related to the role played by demand factors. First, we examine the commitment of industries to invest profits in cumulative R&D efforts; second, the ability of industries’ R&D to introduce to new products in markets; third, the impact of new products on entrepreneurial profits. We consider the nature and variety of innovative efforts-distinguishing in particular between strategies of technological and cost competiveness-and we introduce the role of demand in pulling technological change and supporting profits. We develop a simultaneous three-equation model and we test it at industry level-for 38 manufacturing and service sectors- on six European countries over two time periods from 1994 to 2006. The results show that the model effectively accounts for the dynamics of European industries and highlights the interconnections between the different factors contributing to growth
Appraising Schumpeter's 'Essence' after 100 Years: From Walrasian Economics to Evolutionary Economics
Full text linkSchumpeter’s unique type of evolutionary analysis can hardly be understood unless we recognise that he developed it in relation to a study of the strength and weaknesses of the Walrasian form of Neoclassical Economics. This development was largely performed in his first book Wesen und Hauptinhalt der theoretischen Nationalökonomie. This German-language book - which in English might be called ‘Essence and Scope of Theoretical Economics’ - was published a century ago (in 1908). Different readings of Wesen provide many clues about the emergence and structure of Schumpeter’s programme for teaching and research. This programme included a modernisation of static economic analysis but he concentrated on the difficult extension of economic analysis to cover economic evolution. Schumpeter thought that this extension required a break with basic neoclassical assumptions, but he tried to avoid controversy by presenting it as only requiring the introduction of innovative entrepreneurs into the set-up of the Walrasian System. Actually, he could easily define the function of his type of entrepreneurs in this manner, but the analysis of the overall process of evolution required a radical reinterpretation of the system of general economic equilibrium. He thus made clear that he could not accept the standard interpretation of the quick Walrasian process of adaptation (tâtonnement). Instead, he saw the innovative transformation of routine behaviour as a relatively slow and conflict-ridden process. This reinterpretation helped him to sketch out his theory of economic business cycles as reflecting the waveform process of economic evolution under capitalism.Economic statics; evolutionary dynamics; business cycles; Joseph A. Schumpeter; Léon Walras
The Dynamics of the Organisation of Industry
Full text linkThe paper presents and formalises an approach to the evolution of the organisation of industry which starts from multi-activity firms, and which relates to economists like Young, Stigler, and Richardson. To capture the open-ended process of disintegration of industry, the paper operates with decomposable tasks and gives an account of the vertical and horizontal structure of production by means of weighted trees — in the graphtheoretical sense. Based on this addition to the analytical toolbox, the paper gives an account of the decomposition of industry as driven by the structural innovations and process innovations of firms that specialise and exchange in an open-ended evolutionary process.Vertical disintegration, horizontal disintegration, production trees, specialisation of production, specialisation of R&D, George B. Richardson
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