DKE Part 4: Evolutionary Model of Innovation

stella.kalis
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stella.kalis
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DKE Part 4: Evolutionary Model of Innovation
1 Two Degrees:
1.1 Incremental
1.2 Radical / Discontinuous: new industries created e.g. Tesla car, Electricity, Internet, Smartphones.
2 Conventional Vs Informational
2.1 Conventional
2.1.1 Linear
2.1.2 precise
2.1.3 emphasis on:
2.1.3.1 tangibles
2.1.3.2 manufacturing
2.1.3.3 knowledge creation
2.1.4 Inventions -> Innovation -> Diffusion
2.2 Informational
2.2.1 non-linear
2.2.2 non precise
2.2.3 info from many sources incl. R&D
2.2.4 emphasis on:
2.2.4.1 Intangibles
2.2.4.2 knowledge flow & creation
2.2.5 services innovation
2.2.6 knowledge as input and output
2.2.7 Technology as information
3 Joseph Schumpeter
3.1 critical of mainstream equilibrium theory
3.2 capitalism as evolutionary process
3.2.1 method of econ change
3.2.2 can never be stationary; dynamic & growth oriented
3.3 Prime Mover = The NEW goods, methods of production, markets, etc. i.e. New Technology & Innovation
3.4 growth of knowledge processes
3.5 Innovation occuring in Clusters, not in isolation.
3.5.1 creative destruction where obsolete replaced by the innovative
3.6 Growth: Technological Innovation NOT Price Competition
3.7 Schumpeterian Entrepreneur: driver of innovation, foundation of growth, development, change within capitalism (the central figure).
3.7.1 First person to Implement & Commercialise an innovation (not neccesarily the inventor)
4 Require both Openness & Stability for economic growth
4.1 optimal Resource allocation (Static Efficiency) will reduce dynamics over long term.
4.1.1 i.e. pursuit of static efficienc may lead to inflexibility.
5 Complexity Theory
5.1 econ = complex evolving system consisting of:
5.1.1 Economic Agents / elements
5.1.2 Connections between them
5.2 Systems View: Connections > Agents
5.2.1 ITC made connections even more prolific & important.
5.3 Complex Systems e.g.: brains, ecologies, weather, stock market, economies, electrical network
5.4 Instability arisees from Structural changes and Sensitive dependence on intial conditions.
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