Dynamics of innovation over time: Evidence from the Spanish business elite

Abstract

Although Spain was not a leading country in technology, it generated numerous innovations, which must be analyzed in order to understand its particular development trajectory. This paper makes a contribution in this line by quantifying the innovation activity of the country's business elite between c. 1870 and 1970. In addition, we have sought to verify whether some of the well-known debated dynamics of innovation over time are fulfilled in this case. First with a descriptive analysis and then through the VAR technique, it has been found that innovation occurred in waves, as Schumpeter pointed out despite Kuznets; major innovations were followed by incremental advances; process innovations predominated in the early stages of modern development and product innovations gained preponderance later; and that indigenous innovation favored the importation of technology. A structural break test has identified sharp fluctuations in innovation, apparently related to institutional factors and relevant changes in the economy.