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orignal paper: Modelling research and development: How do firms solve design problems?


  • Ben Cooper

    () (Nuffield College, Oxford OX1 1NF, UK (e-mail:


One way of thinking about research and development is to recognise that firms are trying to solve particular design problems. We often build these design problems into our models, but are forced to oversimplify them in order to make the models solvable. The approach taken in this paper is to acknowledge that design problems are often insoluble using standard techniques and to model instead the process by which firms solve them. Two such processes are simulated in detail. The first, individual experimental search, is based on a problem-solving technique known as simulated annealing. The second, partial imitation, involves learning at a social level and is based on a problem-solving technique known as the genetic algorithm. Some economic implications of these processes are explored, including their application to stochastic learning curves, patent design and the importance of `technodiversity' in the introduction of new technology to developing countries.

Suggested Citation

  • Ben Cooper, 2000. "orignal paper: Modelling research and development: How do firms solve design problems?," Journal of Evolutionary Economics, Springer, vol. 10(4), pages 395-413.
  • Handle: RePEc:spr:joevec:v:10:y:2000:i:4:p:395-413

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    References listed on IDEAS

    1. Carolina Castaldi & Giovanni Dosi, 2003. "The Grip of History and the Scope for Novelty: Some Results and Open Questions on Path Dependence in Economic Processes," LEM Papers Series 2003/02, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    2. Brian Loasby, 2003. "Closed models and open systems," Journal of Economic Methodology, Taylor & Francis Journals, vol. 10(3), pages 285-306.
    3. Brian J. Loasby, 2001. "Time, knowledge and evolutionary dynamics: why connections matter," Journal of Evolutionary Economics, Springer, vol. 11(4), pages 393-412.
    4. Pierre Garrouste & Stavros Iaonnides, 2001. "Evolution and Path-Dependency in Economic Ideas: Past and Present," Post-Print halshs-00274526, HAL.
    5. Mina, A. & Ramlogan, R. & Tampubolon, G. & Metcalfe, J.S., 2007. "Mapping evolutionary trajectories: Applications to the growth and transformation of medical knowledge," Research Policy, Elsevier, vol. 36(5), pages 789-806, June.
    6. Nelson, Richard R., 2003. "On the uneven evolution of human know-how," Research Policy, Elsevier, vol. 32(6), pages 909-922, June.
    7. Metcalfe, J.S. & James, Andrew & Mina, Andrea, 2005. "Emergent innovation systems and the delivery of clinical services: The case of intra-ocular lenses," Research Policy, Elsevier, vol. 34(9), pages 1283-1304, November.
    8. Arora, Ashish & Gambardella, Alfonso, 1990. "Complementarity and External Linkages: The Strategies of the Large Firms in Biotechnology," Journal of Industrial Economics, Wiley Blackwell, vol. 38(4), pages 361-379, June.
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    Cited by:

    1. Roos, Michael W. M., 2015. "The macroeconomics of radical uncertainty," Ruhr Economic Papers 592, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    2. Heshmati, Almas & Lenz-Cesar, Flávio, 2013. "Determinants and Policy Simulation of Firms Cooperation in Innovation," IZA Discussion Papers 7487, Institute for the Study of Labor (IZA).
    3. Andrea Bonaccorsi, 2011. "A Functional Theory of Technology and Technological Change," Chapters,in: Handbook on the Economic Complexity of Technological Change, chapter 12 Edward Elgar Publishing.

    More about this item


    Research and development - Design problems - Simulated annealing - Genetic algorithm - Technodiversity;

    JEL classification:

    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D


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