Reallocating Innovative Resources Around Growth Bottlenecks
AbstractEconomy-wide increasing returns to scale embodied in a general purpose technology (GPT) and its applications are often a key source of long-run growth. Yet the successful exploitation of increasing returns calls for coordination on a particular technological direction, reducing flexibility and choice ex post and potentially creating a growth bottleneck. We examine how such a growth bottleneck can eventually be overcome under certain key conditions. Demand must be fundamentally diverse so that the original GPT does not serve all demanders. Firms barred from entry into the primary GPT market can then reallocate innovative resources to create new markets to meet the unserved demand. The demand in these new markets must be valuable enough to generate a positive feedback cycle that results in considerable technical advance in the alternative GPT. This ultimately can lead to indirect entry by the alternative GPT into the original GPT market if and when it becomes strong enough to compete with the original GPT. We illustrate the role of this sequence in the two most important technologies for automating white-collar work of the last 50 years.
Download InfoIf 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.
Bibliographic InfoPaper provided by Stanford Institute for Economic Policy Research in its series Discussion Papers with number 09-022.
Date of creation: Jul 2010
Date of revision:
growth bottlenecks; resources; long-run growth;
Other versions of this item:
- Timothy Bresnahan & Pai-Ling Yin, 2010. "Reallocating innovative resources around growth bottlenecks," Industrial and Corporate Change, Oxford University Press, vol. 19(5), pages 1589-1627, October.
- O31 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
- O32 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Management of Technological Innovation and R&D
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Dosi, Giovanni, 1993.
"Technological paradigms and technological trajectories : A suggested interpretation of the determinants and directions of technical change,"
Elsevier, vol. 22(2), pages 102-103, April.
- Dosi, Giovanni, 1982. "Technological paradigms and technological trajectories : A suggested interpretation of the determinants and directions of technical change," Research Policy, Elsevier, vol. 11(3), pages 147-162, June.
- Lipsey, Richard G. & Carlaw, Kenneth I. & Bekar, Clifford T., 2005. "Economic Transformations: General Purpose Technologies and Long-Term Economic Growth," OUP Catalogue, Oxford University Press, number 9780199290895.
- Griliches, Zvi (ed.), 1992. "Output Measurement in the Service Sectors," National Bureau of Economic Research Books, University of Chicago Press, edition 1, number 9780226308852, July.
- Timothy F. Bresnahan & Shane Greenstein & Rebecca M. Henderson, 2011. "Schumpeterian Competition and Diseconomies of Scope: Illustrations from the Histories of Microsoft and IBM," NBER Chapters, in: The Rate and Direction of Inventive Activity Revisited, pages 203-271 National Bureau of Economic Research, Inc.
- Zvi Griliches, 1992. "Introduction to "Output Measurement in the Service Sectors"," NBER Chapters, in: Output Measurement in the Service Sectors, pages 1-22 National Bureau of Economic Research, Inc.
- Bresnahan, Timothy F. & Trajtenberg, M., 1995.
"General purpose technologies 'Engines of growth'?,"
Journal of Econometrics,
Elsevier, vol. 65(1), pages 83-108, January.
- Gans, Joshua S. & Stern, Scott, 2003. "The product market and the market for "ideas": commercialization strategies for technology entrepreneurs," Research Policy, Elsevier, vol. 32(2), pages 333-350, February.
- Malerba,Franco & Brusoni,Stefano (ed.), 2007. "Perspectives on Innovation," Cambridge Books, Cambridge University Press, number 9780521866644, December.
- Zvi Griliches, 1992. "Output Measurement in the Service Sectors," NBER Books, National Bureau of Economic Research, Inc, number gril92-1.
- Timothy F. Bresnahan, 2002. "Prospects for an Information-Technology-Led Productivity Surge," NBER Chapters, in: Innovation Policy and the Economy, Volume 2, pages 135-162 National Bureau of Economic Research, Inc.
- Gilbert, Richard J, 1992. "Symposium on Compatibility: Incentives and Market Structure," Journal of Industrial Economics, Wiley Blackwell, vol. 40(1), pages 1-8, March.
- Malerba,Franco & Brusoni,Stefano (ed.), 2007. "Perspectives on Innovation," Cambridge Books, Cambridge University Press, number 9780521685610, December.
- Uwe Cantner & Simone Vannuccini, 2012. "A New View of General Purpose Technologies," Jena Economic Research Papers 2012-054, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
- Isabel Almudi & Francisco Fatas-Villafranca & Luis Izquierdo, 2013. "Industry dynamics, technological regimes and the role of demand," Journal of Evolutionary Economics, Springer, vol. 23(5), pages 1073-1098, November.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Anne Shor).
If references are entirely missing, you can add them using this form.