Fundamental Elements of a ‘Quasi-Darwinian’ Evolutionary Theory

This chapter focuses on the modifications to the elemental concepts of the quasi-Darwinian theory of economic evolution featured in Modern Evolutionary Economics (MEE) that are required to invoke them into a quasi-Darwinian evolutionary theory of dynamic strategy. The quasi-Darwinian theory of economic evolution lends itself most suitably to explain the ‘hybrid’ nature of evolution of a population of profit-seeking firms embedded within a competitive enterprise system. The fundamental elements of a ‘quasi-Darwinian’ evolutionary theory, which underpins the extant evolutionary theorizing in both economics and strategy, are: (a) perpetual search as the variety generation mechanism, (b) dynamic market competition as the selection mechanism, and (c) continuous learning and adaptation. How do these elements depart from the classical ‘Darwinian’ approach? What, if any, are their shortcomings that ought to be addressed for these elements to support the ‘quasi-Darwinian’ evolutionary theory of dynamic strategy? The main concerns with each element include: (a) efficacy of local search in dynamic competitive environments, (b) equilibrium-based conceptualization of dynamic market competition, and (c) conceptualization of adaptation as a one-way process. The theory of economic evolution by non-genetic means of information transmission, which is essentially an evolutionary theory of learning and adaptation, requires further conceptual development in each of its three elemental theories—of search, selection, and adaptation—to more realistically capture the evolutionary dynamics of learning and adaptation in dynamic competitive environments.