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Technological Opportunities and Growth in the Natural Resource Sector

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  • Lundström, Susanna

    () (Sida)

Abstract

Both technological and natural resource possibilities seem to evolve in cycles. The “Resource Opportunity Model” in this paper introduces the technological opportunity thinking into natural resource modeling. The natural resource industries’ choice between incremental, complementary innovations, and drastic, breakthrough innovations, will give rise to long-run cycles in the so-called familiar resource stock, which is the amount of natural resources determined by the prevailing paradigm. Incremental innovations will increase the exhaustion of the stock, and drastic innovations will create a new paradigm and, thereby, new technological opportunities and a new stock of familiar resources. Drastic innovations are endogenously affected by the knowledge level and induced either by scarcity of technological opportunities or by scarcity of resources. Generally, increased innovation ability increases the knowledge stock and cumulative income over time, but does not affect the sustainability of the resource stock even though the intensity of the resource cycles increases. However, too low innovation ability might drive the sector into technological stagnation, and resource exhaustion in the long run; and too high innovation ability might drive the sector into extraction stagnation, and resource exhaustion in the short run.

Suggested Citation

  • Lundström, Susanna, 2003. "Technological Opportunities and Growth in the Natural Resource Sector," Working Papers in Economics 116, University of Gothenburg, Department of Economics.
  • Handle: RePEc:hhs:gunwpe:0116
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    File URL: http://hdl.handle.net/2077/2892
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    References listed on IDEAS

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    More about this item

    Keywords

    Cycles; Economic growth; Induced innovations; Natural resources; Paradigm shifts; Technological opportunities;

    JEL classification:

    • N50 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - General, International, or Comparative
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • Q30 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - General
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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