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Modeling Novelty-Driven Industrial Dynamics with Design Functions: understanding the role of learning from the unknown

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  • Pascal Le Masson

    () (CGS i3 - Centre de Gestion Scientifique i3 - MINES ParisTech - École nationale supérieure des mines de Paris - PSL - PSL Research University - CNRS - Centre National de la Recherche Scientifique)

  • Armand Hatchuel

    () (CGS i3 - Centre de Gestion Scientifique i3 - MINES ParisTech - École nationale supérieure des mines de Paris - PSL - PSL Research University - CNRS - Centre National de la Recherche Scientifique)

  • Benoit Weil

    () (CGS i3 - Centre de Gestion Scientifique i3 - MINES ParisTech - École nationale supérieure des mines de Paris - PSL - PSL Research University - CNRS - Centre National de la Recherche Scientifique)

Abstract

In his synthesis on industrial dynamics, Malerba called for a renewal of the models for the dynamic analysis of innovation and the evolution of industries [1]. To go this way we investigate the relationship between knowledge dynamics, innovation dynamics, and sectoral growth in the particular case of Schumpeterian "development" [2]. Our analysis is based on a model where economic actors (suppliers and customers) are represented by design functions, endogenizing the generation of "unknown" products, the regeneration of competences and of utility functions. We use the model to simulate four situations of industrial dynamic characterized by the (successful or impeded) emergence of novelty: automotive industry, pharmaceutical and biotech industry, semiconductor industry and orphan innovation in cleantech. This model shows that the success of "novelty-oriented" industrial dynamics depends on the efficiency of the coupling between design functions in the economy. We show that 1) good suppliers' profit and customers user-value relies on a sparing of knowledge and novelty; 2) coupling is based less on the initial level of competences and knowledge capitalization than on learning from "unknown" products; 3) learning from the unknown creates externalities, so that the exploration of the unknown appears as a new kind of "common good".

Suggested Citation

  • Pascal Le Masson & Armand Hatchuel & Benoit Weil, 2010. "Modeling Novelty-Driven Industrial Dynamics with Design Functions: understanding the role of learning from the unknown," Post-Print hal-00696970, HAL.
  • Handle: RePEc:hal:journl:hal-00696970
    Note: View the original document on HAL open archive server: https://hal-mines-paristech.archives-ouvertes.fr/hal-00696970
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    1. Charles I. Jones, 1995. "Time Series Tests of Endogenous Growth Models," The Quarterly Journal of Economics, Oxford University Press, vol. 110(2), pages 495-525.
    2. Samaniego, Roberto M., 2007. "R D And Growth: The Missing Link?," Macroeconomic Dynamics, Cambridge University Press, vol. 11(05), pages 691-714, November.
    3. María-Isabel Encinar & Félix-Fernando Muñoz, 2006. "On novelty and economics: Schumpeter’s paradox," Journal of Evolutionary Economics, Springer, vol. 16(3), pages 255-277, August.
    4. Martin Fransman & Jackie Krafft, 2002. "Telecommunications," Post-Print hal-00212269, HAL.
    5. Klepper, Steven, 1996. "Entry, Exit, Growth, and Innovation over the Product Life Cycle," American Economic Review, American Economic Association, vol. 86(3), pages 562-583, June.
    6. Ron Adner & Peter Zemsky, 2005. "Disruptive Technologies and the Emergence of Competition," RAND Journal of Economics, The RAND Corporation, vol. 36(2), pages 229-254, Summer.
    7. Richard N. Langlois, 2000. "Knowledge, Consumption, and Endogenous Growth," Working papers 2000-02, University of Connecticut, Department of Economics.
    8. Fulvio Castellacci, 2007. "Technological regimes and sectoral differences in productivity growth ," Industrial and Corporate Change, Oxford University Press, vol. 16(6), pages 1105-1145, December.
    9. Frans A. J. Van den Bosch & Henk W. Volberda & Michiel de Boer, 1999. "Coevolution of Firm Absorptive Capacity and Knowledge Environment: Organizational Forms and Combinative Capabilities," Organization Science, INFORMS, vol. 10(5), pages 551-568, October.
    10. Thomas Grebel & Jackie Krafft & Pier-Paolo Saviotti, 2006. "On the Life Cycle of Knowledge Intensive Sectors," Revue de l'OFCE, Presses de Sciences-Po, vol. 97(5), pages 63-85.
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