ABSTRACT
The Schumpeterian perspective that informed so much of Ehud Zuscovitch’s thinking and writing on economics stressed the role of creative innovation as an antidote to the meager profi t margins of conventional production under neoclassical competitive conditions. Creative innovation allows one to be a price-maker rather than a price-taker, a principle he applied in his personal and professional life as often as he could, preferring as a rule the intellectual adventure of the new and untried over routine, quotidian academic production. This chapter refl ects a pattern of mutual infl uence between Ehud and myself that colored much of our joint work – and some of the work we produced separately – the economics of innovation and technological change, refl ecting Ehud’s well-articulated Schumpeterian perspective and my own neoclassical training. 2
Specifi cally, the present chapter is an attempt to embed a heterodox perspective on technological infrastructure (TI), developed in Tassey ( 1991 ), Justman et al . ( 1993 ), Justman and Teubal ( 1995 ), and Teubal et al . ( 1996 ) within a fully specifi ed neoclassical framework. It is an approach that emphasizes the special characteristics of TI that distinguish it from other forms of industrial infrastructure, viewing it as a network of differentiated intermediate inputs that supports the competitiveness of domestic manufacturing in global markets and attracts international capital for investment in local industry.
