Innovation, competition, and growth: Schumpeterian ideas within a Hicksian framework

Schumpeter’s ideas, which should be the basis of any evolutionary approach to the relations between innovation, competition and growth, are revisited and interpreted within the analytical framework proposed by Hicks in Capital and Time . Two main results emerge. First, the introduction of any new te...

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Bibliographic Details
Published in:Journal of evolutionary economics 2008-08, Vol.18 (3-4), p.295-311
Main Author: Gaffard, Jean-Luc
Format: Article
Language:English
Subjects:
Competition
Competitiveness
Correlation analysis
Creative destruction
Economic development
Economic Growth
Economic stability
Economic theory
Economic Theory/Quantitative Economics/Mathematical Methods
Economics
Economics and Finance
Entrepreneurship
Equilibrium
Humanities and Social Sciences
Innovation
Innovations
Institutional/Evolutionary Economics
Market structure
Microeconomics
Monopolies
Prices
Product development
Productivity
R & D/Technology Policy
Regular Article
Studies
Volatility
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Summary:Schumpeter’s ideas, which should be the basis of any evolutionary approach to the relations between innovation, competition and growth, are revisited and interpreted within the analytical framework proposed by Hicks in Capital and Time . Two main results emerge. First, the introduction of any new technology may lead to higher unemployment and reduced productivity; only an active monetary (and banking policy) will allow the economy to capture productivity gains. Second, within an industry confronted by recurrent technological changes, certain monopoly practices may be needed for this industry to converge towards an efficient market structure determined by the content of technology and the profile of demand. These results suggest some reconsideration of the macroeconomic and industrial or competition policies designed, in Europe, to cope with both technical change and globalization in modern economies.
ISSN:0936-9937
1432-1386
DOI:10.1007/s00191-008-0102-z