01 Basic defintions and concepts

Change in the amount of output produced from the same inputs.

Change in the amount of output produced from the same inputs.

The increased application of scientific knowledge in the form of new consumer goods and services, new inputs into production, new methods of producing goods and services, or new ways of operating and managing organisations.

Innovation results from learning processes based on the accumulation of experience and knowledge.

• Historical time

• Technical space

  • knowledge + technological

• Structural conditions of economic systems

• geographic space

• firms

• product characteristics

Production function represented by an outward movement at one point and not a general shift.

• No spillover improvements in other techniques brought by technological change

• Creative, myopic agents introduce localized technological changes (localized and limited learning processes)

• High switching costs due to irreversible production factors and external conditions of factor markets

• Traditional position only reached if spillovers were in every technique

Process of creating a new idea or method that might be patented or not.

Commercialization and application of an invention to the development of a new process or product to meet a user or market needs

Process of selecting a product for use by an individual or organization

Process by which an innovation is communicated through certain channels over time among the members of a social system.

1. Radical innovation

2. Incremental innovation

3. Changes of technology system

4. Changes in the techno-economic paradigm

5. Creative accumulation

• New entrants and new technologies displace incumbent firms, existing products or processes -> creative destruction

  • changes everything!

• established firms gradually improve existing technologies through “learning by doing” or “learning by using”

  • small change

• Combination of radical/incremental innovation combined with organization changes resulting in the creation of entirely new sectors (e. g. biotechnology, energy technology)

• Large-scale, revolutionary changes carried by new technology systems

  • Kondratiev long waves

• established firms look for new technologies and try to integrate them into functioning processes and products together with the established ones, thus producing “evolving knowledge”

1. exonomic prosperity

2. recession

3. depression

4. recovery

• Disruptive and incremental

• firms and consumer

The inducement hypothesis develops the assumption that firms generate new technologies when factor costs change.

In the developed approach, in fact, any increase in wages (as well as in rental costs) induces the generation of new technology, because of the disequilibrium effects of irreversibility of the factors of production and related switching costs

The developed framework provides a microeconomic tool with which to understand the role of relative prices as determinants of the direction of technological change at the level of the system.