Title:
Selection environments and innovation regimes: Micro-macro innovation dynamics in late development
Selection environments and innovation regimes: Micro-macro innovation dynamics in late development
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Aguayo, Francisco
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Abstract
This paper explores macro-, and meso-economic forces shaping search and explorative
behaviour at the firm level. In particular, we focus on top-down selection mechanisms (both
direct and indirect) that modify the rate and direction of technological change, as well as
the nature of technological learning at the micro-economic level.
Studies on economic development in developing countries focus increasingly on the
concepts of technological learning and technology systems. It is well accepted that
fundamental causes of differences in long term economic performance expresses
technological asymmetries at the firm and sectoral level (Dosi, Pavitt and Soete, 1990;
Fagerberg, 1994). Given that technological learning is embedded in production chains,
knowledge networks, and institutions, patterns of accumulation of technological
capabilities depend in turn on related systems of innovation (Lundvall, 1992; Nelson, 1993).
Opportunities for catching-up and narrowing technological asymmetries depend as well on
the particular innovation regime, the rules govern search and innovative behaviour that in a
particular industry and in a particular time (Nelson and Winter, 1982; Malerba and
Orsenigo, 1995).
However, macro-to-micro causality has been largely excluded in these fundamental
explanations of economic performance (see Cimoli and Katz, 2002). Macroeconomic
environments determining levels and growth rates of key variables can influence directly
the rates of technology absorption and local innovation through traditional channels like
relative prices of capital, capital turnover rates, market size and growth rates, etc. Next to
these quantitative impacts, we argue, macroeconomic settings can also affect the nature of
technical change, by influencing market- and firm-level selection mechanisms that govern
an economy's capacity of generating variety.
Following Nelson and Winter (1982) model of search and selection, we develop an analytic
framework that links explicitly micro-level behaviour and learning, with macroeconomic
selection mechanisms. In turn, we show how macro-to-micro causation can bias
technological behaviour into certain directions, reinforcing cumulative causation and path-dependent features of technological learning. Next, we examine the conditions under which
adverse selection environments can generate development traps of slow economic growth,
and slow variety generation. In circumstances where active competition and market
transference mechanisms operate in a relatively fluid manner across borders, economic
resilience is crucial for preventing economic systems to rely purely on static advantages
that may result socially and environmentally deleterious in the long term. Finally, we argue
how the learning restrictions set by astringent selection environments can and have been
overcome under certain innovation regimes.
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Date Issued
2008-09
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