EVOLUTIONARY ECONOMICS AND TECHNOLOGY POLICY

This paper proposes to explore the economics of technology policy from an evolutionary perspective. The central concern is with the mechanisms of economic change, in this case in relation to the development of new technologies and patterns of organisation, and their spread into the wider economic system. In this sense we build upon one of the major stylized facts of modern growth, structural change at all levels from the microeconomic to the macroeconomic. The innovation activities of firms involve a wide range of other institutions supplying the knowledge and skills which underpin the efforts of individual firms. We term this the systems perspective on innovation. Secondly, it is not helpful to treat innovation and the diffusion of innovation as separate categories. We begin with a brief review of the familiar market failure perspective on policy and build from this into a brief overview of the evolutionary approach. The paper concludes with an outline of the systems perspective on technology policy. -from Author