ABSTRACT
Innovation and techno lo gical change are im port ant factors in ana lyses of the determinants of long term eco nomic growth, and in firm or industry level investigations of the relationship between in nova tion and eco nomic performance. The first ana lysis of in nova tion and techno lo gical change was conducted by Solow (1957). In this and sub sequent con tri bu tions based on a theor et ical framework originating in the ag greg ate production function, Solow tries to identi fy technical pro gress in the “residual” com pon ent of eco nomic growth, which cannot be explained by the con tri bu tion of production factors such as labour and capital. This so called “growth accounting” approach emphas izes the relev ance of techno lo gical change as the key factor in explaining the ag greg ate productivity of an eco nomic system. Within an ana lyt ical framework based on production functions, most industry or firm level ana lyses confirm the im port ance of investment in R&D, and of innov at ive ac tiv ities more gen erally, in determining firms’ com petit ive ad vant age and eco nomic performance. The works of several authors (Griliches, 1979, 1980, 1986, 1994; Griliches & Mairesse, 1985, 1995; Hall & Mairesse, 1995; Harhoff, 1998; Wakelin, 2001; Wang & Tsai, 2003; Griffith et al., 2004; Parisi et al., 2006) are examples of such studies. They find a gen erally pos it ive effect of techno lo gical in nova tions on productivity growth. An al tern ative approach to analysing techno lo gical change is based on the funda mental con tri bu tions of Schumpeter (1939, 1943). Within this line of research, techno lo gical change is in ter preted as a pro cess of creative destruction. Although neo Schumpeterian approaches such as the evolutionary theories of eco nomic and techno lo gical change differ from the mainstream in terms of their theor et ical framework, they agree about the impact of techno lo gical in nova tion on ag greg ate and firm level performance (Dosi, 1988; Malerba & Orsenigo, 1995; Metcalfe 1997, 1998; Cainelli et al., 2006).
