ABSTRACT
This chapter deals with the conceptual foundations – in economic analysis – of technology and innovation policy. Evolutionary analysis of innovation issues is in a state of flux, but even so its concepts, methods and results are reasonably well defined and are by no means in accord with neoclassical ideas. There can be little doubt that neoclassical approaches have dominated the theoretical analysis of microeconomic policy. In an evolutionary context, growth depends on search for and development of new techniques which can follow either from existing knowledge bases, or from learning. Market selection generates an evolution towards particular patterns of products and processes in two ways. Firstly, there is a survival and growth mechanism: a successful technology generates resources for investment and hence for growth of the firm. Secondly there is active learning and imitation, which introduces a Lamarckian element into economic and general cultural versions of evolutionary theory.
