Advanced Search
MyIDEAS: Login

Economic development by the creation of new sectors

Contents:

Author Info

  • Pier Saviotti

    ()

  • Andreas Pyka

    ()

Abstract

The basic theme underlying this paper is qualitative change taking place during economic development. These changes in the composition of the economic system should become one of the most important variables in models of economic growth and development. Our knowledge of the relationship between economic development and qualitative change, however, is still very limited. This paper attempts to shed light on some important aspects of the role played by qualitative change in economic development, by laying the foundations of a model in which changes in the composition of the economic system are endogenously generated by the evolution of the system itself and, in turn, affect its future development. The model has a strong Schumpeterian flavour in that the first entrepreneur entering a market enjoys a temporary monopoly. This temporary monopoly is eroded by the entry of imitators, that gradually increases the intensity of competition. The saturation is reinforced as the demand for what was a new product comes to be satisfied. In this way the adjustment gap initially created by the innovation is eliminated transforming a niche into a mature market, which becomes one of the routines of the economic system. As soon as a sector becomes saturated there is an increasing inducement for incumbent firms to exit and to create a new niche, where once more they will have a temporary monopoly. To put it in another, slightly different, form, we can say that economic development is a process in which new activities emerge, old ones disappear, the weight of all economic activities and their patterns of interaction change. Copyright Springer-Verlag Berlin/Heidelberg 2004

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://hdl.handle.net/10.1007/s00191-003-0179-3
Download Restriction: Access to full text is restricted to subscribers.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Article provided by Springer in its journal Journal of Evolutionary Economics.

Volume (Year): 14 (2004)
Issue (Month): 1 (January)
Pages: 1-35

as in new window
Handle: RePEc:spr:joevec:v:14:y:2004:i:1:p:1-35

Contact details of provider:
Web page: http://link.springer.de/link/service/journals/00191/index.htm

Order Information:
Web: http://link.springer.de/orders.htm

Related research

Keywords: Economic growth and development; Qualitative change; Neo-Schumpeterian-economics;

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:spr:joevec:v:14:y:2004:i:1:p:1-35. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Guenther Eichhorn) or (Christopher F Baum).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.