ABSTRACT
This chapter provides a brief examination of the nature and significance of a number of relationships between technical change and innovation and the processes of economic growth and structural change. It examines the micro-foundations for innovation and technical change, primarily at the level of the firm, as important components in the mechanism which explains the process of economic growth in the long run. Innovations are assumed to provide the firm with a 'competitive edge' or 'comparative advantage' over firms in the same industry and same market. In the USA formal theorizing on the process of economic growth has been primarily carried out within the general framework of an assumed stable, equilibrium-seeking economy. Certain mechanical macro-economic relationships and associations between technical innovation and economic growth and structural change were discussed. The dominant neoclassical macro-economic literature, in the late 1950s as well as in contemporary times, portrayed 'technical change as a predominantly mechanical process, independent of human will and behaviour'.
