Growing by leaps and inches: creative destruction, real cost reduction, and inching up
AbstractMost firms achieve perfective progress, incrementally improving commodities or productivity. But technological progress is concentrated in a few firms achieving metamorphic progress: forming or transforming industries with technological breakthroughs (e.g., biotechnology, lasers, semiconductors, nanotechnology). Unless congruent with incumbents' science and technology base, metamorphic progress promotes entry. Scientific breakthroughs embodied in discovering scientists, protected by natural excludability and transferred by learning-by-doing-with at the bench generally drive metamorphic progress. Embodied knowledge is rivalrous and leads to entry and industry dominance by star scientist--linked firms. Incorporating this scientific entrepreneurial process is essential to improving--if not transforming--endogenous growth models. Copyright 2003, Oxford University Press.
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Bibliographic InfoArticle provided by Federal Reserve Bank of Dallas in its journal Proceedings.
Volume (Year): (2003)
Issue (Month): Sep ()
Other versions of this item:
- Michael R. Darby & Lynne G. Zucker, 2003. "Growing by Leaps and Inches: Creative Destruction, Real Cost Reduction, and Inching Up," Economic Inquiry, Western Economic Association International, vol. 41(1), pages 1-19, January.
- Michael R. Darby & Lynne G. Zucker, 2002. "Growing by Leaps and Inches: Creative Destruction, Real Cost Reduction, and Inching Up," NBER Working Papers 8947, National Bureau of Economic Research, Inc.
- O30 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - General
- L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
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