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Industrial Dynamics and Endogenous Growth


  • Bo Carlsson
  • Gunnar Eliasson


Economic growth can be described at the macro level, but it can never be explained at that level. Economic growth is a matter of experimental creation of a variety of technologies that are confronted with potential buyers (customers) in dynamic markets and hierarchies. Thus, economic growth results from the interaction of a variety of actors who create and use technology, and demanding customers. Economic growth is inherently a micro phenomenon. The focus of this paper is on the conditions that are conducive to creation of a variety of new technologies and on those that are necessary and sufficient for the efficient selection and capturing of winners. We refer to the former as a technological system and the latter as a competence bloc, combined with an experimentally organized economy (EOE). The confrontation between actors and between actors and ideas in the markets for innovation gives rise to what we call industrial dynamics. By specifying the mechanisms that generate new technology (rather than assuming an exogenous supply of technology), we endogenize economic growth.

Suggested Citation

  • Bo Carlsson & Gunnar Eliasson, 2003. "Industrial Dynamics and Endogenous Growth," Industry and Innovation, Taylor & Francis Journals, vol. 10(4), pages 435-455.
  • Handle: RePEc:taf:indinn:v:10:y:2003:i:4:p:435-455 DOI: 10.1080/1366271032000163676

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    References listed on IDEAS

    1. C. Antonelli, 2007. "Localized Technological Change," Chapters,in: Elgar Companion to Neo-Schumpeterian Economics, chapter 16 Edward Elgar Publishing.
    2. Fritsch, M. & Lukas, R., 1998. "Innovation, Cooperation, and the Region," Papers 98/1, Bergakademie Freiberg, Faculty of Economics and Business Administration.
    3. Fritsch, Michael & Lukas, Rolf, 2001. "Who cooperates on R&D?," Research Policy, Elsevier, vol. 30(2), pages 297-312, February.
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    5. Cooke, Philip & Gomez Uranga, Mikel & Etxebarria, Goio, 1997. "Regional innovation systems: Institutional and organisational dimensions," Research Policy, Elsevier, vol. 26(4-5), pages 475-491, December.
    6. Fritsch, Michael & Franke, Grit, 2004. "Innovation, regional knowledge spillovers and R&D cooperation," Research Policy, Elsevier, vol. 33(2), pages 245-255, March.
    7. Michael Fritsch, 2000. "Interregional Differences in R&D Activities—An Empirical Investigation," European Planning Studies, Taylor & Francis Journals, vol. 8(4), pages 409-427, August.
    8. Michael Fritsch, 2004. "Cooperation and the efficiency of regional R&D activities," Cambridge Journal of Economics, Oxford University Press, vol. 28(6), pages 829-846, November.
    9. Michael Fritsch, 2001. "Co-operation in Regional Innovation Systems," Regional Studies, Taylor & Francis Journals, vol. 35(4), pages 297-307.
    10. Audretsch,David B. & Thurik,Roy (ed.), 1999. "Innovation, Industry Evolution and Employment," Cambridge Books, Cambridge University Press, number 9780521641661, March.
    11. Audretsch, David B & Stephan, Paula E, 1996. "Company-Scientist Locational Links: The Case of Biotechnology," American Economic Review, American Economic Association, vol. 86(3), pages 641-652, June.
    12. Paul M. Romer, 1994. "The Origins of Endogenous Growth," Journal of Economic Perspectives, American Economic Association, vol. 8(1), pages 3-22, Winter.
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    Cited by:

    1. Lindholm-Dahlstrand, Asa & Andersson, Martin & Carlsson, Bo, 2016. "Entrepreneurial Experimentation: A key function in Entrepreneurial Systems of Innovation," Papers in Innovation Studies 2016/20, Lund University, CIRCLE - Center for Innovation, Research and Competences in the Learning Economy.
    2. Karl Wennberg & Karin Hellerstedt, 2011. "Evolution of knowledge intensive firms: a sociogeographic demand side perspective," ERSA conference papers ersa10p1585, European Regional Science Association.
    3. Hu, Mei-Chih & Hung, Shih-Chang, 2014. "Taiwan's pharmaceuticals: A failure of the sectoral system of innovation?," Technological Forecasting and Social Change, Elsevier, vol. 88(C), pages 162-176.
    4. Freddi, Daniela, 2009. "The integration of old and new technological paradigms in low- and medium-tech sectors: The case of mechatronics," Research Policy, Elsevier, vol. 38(3), pages 548-558, April.
    5. Mathews, John A., 2007. "Biofuels: What a Biopact between North and South could achieve," Energy Policy, Elsevier, vol. 35(7), pages 3550-3570, July.

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