Selection and Evolutionary Patterns of New Firms

The aim of the paper is to study the interrelation between the dynamics of barriers to entry of a tech-taker industry, defined as evolution of the minimum efficient scale and the patterns of survival of a new firm entering the industry. Two regimes of innovation are considered, The first one is the Fordist regime of innovation, characterised by the dominance of static and dynamic scale economies and in which technical change is based on an incremental and cumulative learning processes of innovation and pervasive diffusion through routinised managerial behaviour. The second one is flexible-dynamic regime of innovation, in which the entrepreneurial activity origins discontinuity in the process of innovation until the constitution of a new different technological regime. Industry dynamics is quite different, by ranging between these two extreme archetypes. The Fordist regime of innovation somewhat recalls the version of the second Schumpeter of Capitalism, Socialism and Democracy, in which learning is cumulative and the industry’s performance is function of competitiveness already achieved by each firm. The flexible-dynamic regime of innovation resembles the first Schumpeter of Theory of Economic Development, in which no learning occurs and industrial innovation entirely relies on the “creative destruction” associated with the entry of new firms.