Induced Innovation, Evolutionary Theory and Path Dependence: Sources of Technical Change

Abstract

The 1960s to the 1980s were very productive of new theory and empirical insights into the sources of technical change. In the 1960s and 1970s major attention focused on the implications of changes in demand and relative factor prices on the rate and direction of technical change. In the late 1970s and early 1980s attention shifted to evolutionary models inspired by a revival of interest in Schumpeter's insights into the process of economic development. Since the early 1980s these have been complemented by the development of historically grounded ‘path dependent’ models of technical change. Each of these models has contributed substantial insight into the sources of technical change. This paper was motivated by a perception that each of the three research agendas is approaching a dead end.1 The three models – induced, evolutionary, and path dependent – represent elements of a more general theory that has not yet been invented (Ruttan, 1996a). In a closing comment I suggest some steps toward the development of a more general theory of the sources of technical change.