The dynamics of technology, growth and trade : a Schumpeterian perspective

Why do some countries, such as, for instance, Japan and some other Asian economies in the second half of the twentieth century, grow much faster, and have much better trade performance, than most other countries? Is superior trade performance, what is often termed “competitiveness”, a condition for faster growth, or is it of only minor importance compared to other factors? Although long run economic change, what he termed “development”, was Schumpeter’s favourite topic, he did not enter into the discussion of why some countries succeed better in this respect than others, and how trade interacts with such outcomes. However, it might be argued that his perspective would be highly relevant for the analysis of this topic. This paper outlines a synthetic framework, based on Schumpeterian logic, for analysing what shapes differences in growth and competitiveness. The framework is shown to encompass many of the applied models that have been suggested in the literature.