"Technological revolutions and techno-economic paradigms"
2009. "Technological revolutions and techno-economic paradigms", Cambridge Journal of Economics, Vol. 34, No.1, pp. 185-202
Working paper: January 20, 2009, TOC/TUT WP No. 20 Working Papers in Technology Governance and Economic Dynamics The Other Canon Foundation, Norway and Tallinn University of Technology, Tallinn.
This paper locates the notion of technological revolutions in the Neo-Schumpeterian effort to understand innovation and to identify the regularities, continuities and discontinuities in the process of innovation. It looks at the micro- and meso-foundations of the patterns observed in the evolution of technical change and the interrelations with the context that shape the rhythm and direction of innovation. On this basis, it defines technological revolutions, examines their structure and the role that they play in rejuvenating the whole economy through the application of the accompanying techno-economic paradigm. This over-arching meta-paradigm or shared best practice 'common sense' is in turn defined and analysed in its components and its impact, including the influence it exercises on institutional and social change.
1. Innovation as the dynamic space for the study of technical change
2. The regularities of technical change: innovation trajectories
3. New technology systems and their interactions
4. Technological revolutions and techno-economic paradigms
5. The structure of technological revolutions
6. The emergence of a techno-economic paradigm
The changes in the cost structureThe perception of opportunity spacesNew organisational models
7. Diffusion, resistance and assimilation of successive techno-economic paradigms
8. Putting it together: Regularities, continuities and discontinuities in technical change
The growing impact of the Information Revolution and the visibly increasing importance of innovation and entrepreneurship has resulted in a resurging interest in Schumpeterian ideas. Brad De Long (2007) suggested in his review of McCraw's biography of Schumpeter that the late 20th and early 21st Century should be as much a Schumpeterian reign as the mid 20th Century was Keynesian.
Indeed, Schumpeter (1911, 1939) is among the few modern economists to put technical change and entrepreneurship at the root of economic growth. Yet, strangely enough, he saw technology as exogenous and -together with institutions and social organisations- "outside the domain of economic theory". His focus was the entrepreneur and his goal was to explain the role of innovation in economic growth and on the cyclicality of the system.
It is the Neo-Schumpeterians who have endeavoured to analyse technical change and innovation as such, with their regularities and evolution; who have delved into the characteristics and dynamics of innovation, from individual technical changes through clusters and systems to technological revolutions. This task has been performed by looking at technology, engineering and business organisation from the perspective of the economist and the social scientist, identifying the common features in the processes of evolution, in the interrelations and in the breakthroughs that occur in the most diverse technical areas. These regularities then inform an understanding of the relationship between technical and organisational change, between these and economic performance as well as the mutual relationships between technology, the economy and the institutional context.
This paper will concentrate on technological revolutions and techno-economic paradigms, their definition, the causal mechanisms that bring them about, their impact on the economy and institutions and their relevance for economic analysis. Yet, since these macro phenomena are deeply rooted in the micro-foundations of technical change, the following section will refer to some of the basic theoretical advances made at the micro and meso levels.
'...the book fills an important gap in the literature on business cycles and innovations. I most strongly commend it to all those attempting to understand the past and future evolution of technology and the economy.'
Christopher Freeman, Emeritus Professor, SPRU,
University of Sussex, UK
'...Carlota Perez shows us that historically technological revolutions arrive with remarkable regularity, and that economies react to them in predictable phases. Her argument provides much needed perspective not just on history, but on our own times. And especially on our own information revolution.'
W. Brian Arthur, Santa Fe Institute, New Mexico