The Roots of System Expansion and the Role of Absorptive Capacity

The investigation of the propagation of technological revolutions through the periphery needs a theoretical framework to capture the different forces of this process. This chapter suggests a dialogue among Kondratiev (Long cycles of economic conjuncture. In: Makasheva N, Samuels, WJ, Barnett, V (eds) The works of Nikolai D. Kondratiev, Vol 1. Pickering and Chato (1998), London, pp 25–60, 1926), Furtado (Underdevelopment: to conform or to reform. In: Meier G (ed) Pioneers of development. Second Series. Oxford University/World Bank, Oxford, pp 203–227, 1987), and Cohen and Levinthal (Econ J 99:569–596, 1989). Kondratiev elaborates how technical innovations are factors underlying long term changes and movements shaping the global capitalist system, and how the inclusion of new regions in the world economy is endogenous. Furtado discusses how the center-periphery divide is reshaped by the Industrial Revolution, a contribution to the understanding of how this divide might be reconfigured by subsequent technological revolutions. Cohen and Levinthal present the concept of absorptive capacity that is expanded – as shown in this chapter’s Appendix – to investigate how backward regions and countries need to create local resources to absorb the technologies developed abroad. These three approaches are integrated to introduce a dynamic between expansionary forces, emanating from the center, and assimilatory forces, developed at the periphery, that underpin the concrete propagation of technological revolutions through the periphery.