Technological Path Dependence Research Articles

Regional technological change and path dependency in the danish food processing industry

Evolutionary theories of technological change arguably exert the greatest impact on our understanding of technological change. According to evolutionary economic theory the process of technological change is driven by the continual creation of technological variety through innovation and innovative firm entry and the destruction of variety through the processes of imitation (diffusion), selection and plant exit. This joint process of variety creation and destruction translates micro‐economic diversity into technological progress. A third principle of evolutionary economic theory is the principle of heredity, the communication of information and knowledge over time. The dependence of technology on past and existing knowledge tends to move firms, regions and countries along relatively well‐defined technological trajectories. In this paper technology is measured as a pair of capital and labour input coefficients. Empirical analysis of the Danish food processing industry reveals that technology varies markedly across regions and that differences in regional technological performance persist over time. Multivariate analysis of variance confirms that spatial variation in techniques of production is significant. This study underpins the evolutionary theory of technological change confirming that in the Danish food processing industry, regions move along relatively well‐defined technological trajectories.

Radical innovation for a second nuclear era : Conditions for success

Is it possible to create the conditions for a nuclear revival through suitable technological response which would win over public opinions, industry and governments in the future? This communication analyses the specific characteristics of the nuclear technology which create and maintain a de facto lock-in around the LWR, the conditions for success of the initial technology push, and the factors which made nuclear technology unsuited to its changing environment (problems of social acceptance, competition of new power generation techniques, liberalisation of power industries). The aim is to identify the respective possibility either of pursuing the trajectory of incremental innovations, or of breaking loose from the technological path dependency of LWR systems with a radical innovation such as the Accelerator-Driven System (ADS), in order to overcome the problem of unsuitability of nuclear technology and to respond to the energy and environmental challenges of the XXI e century. Such a radical innovation has to meet numerous safety, non-proliferation and economic criteria, but it could only be part of the response to the social and economic existing constraints on the diffusion of the nuclear technology. How to organise the support to its development without the certainty of its success.

Markov-perfect industrial dynamics with technological path dependence

A game-theoretic intertemporal model of industrial competition is proposed where firms choose their optimal technological strategies as part of some (Markov Perfect) equilibrium with potential entry and exit. The main novel feature of the approach is that technological change is modelled along a directed graph of technologies, which permits a rigorous consideration of key issues such as technological gaps, switching costs and gradual innovation. The paper provides some sufficient conditions for existence and ergodicity of the equilibrium, partially studies the induced population dynamics, and explores a number of other issues by means of numerical simulations.

The rhetoric of a profession and path dependency. Can economists have their theory and free speech too?∗

In his plea for the adoption of a rhetorical stance in economics, Donald McCloskey offers the hope that sensitivity to rhetoric will improve economists’ prose, teaching, relations with other disciplines and arguments, without changing the stories they tell. Rhetoric suggests ways to improve communication, but these involve changes in the profession’s education and incentive systems. Drawing on studies of technological lock-in and path dependency, we examine how the tools, concepts and formal language of neo-classical economics have ‘locked-in’, along with a style of communication inherited from nineteenth century physics. Given the nature of this lock-in, the mainstream profession is as likely to take to rhetoric as it is to write sonnets. Rhetoric promises to promote learning through free, open discussion and clear communication of arguments. We find that economists’ criteria for success and professional values systematically distort scholarly communication. We present two case studies. We conclude that ...

Technological change and path dependence: a co-evolutionary model on a directed graph

In this paper, I model technological change as an evolutionary process of generation and selection of economic activities in a highly path-dependent fashion. There are two key features of our approach. The first is that economic activities are conceived as points of a directed graph and endowed with a corresponding notion of technological distance which determines both the probability of invention of any new activity and the cost of learning it. The second feature is that agents are assumed rational and taken to choose optimally from among the available activities, given the status quo and the associated learning costs. In such a context, we focus on two economies that start off technologically close and evolve side by side with some extent of technological diffusion across them. It is shown that alternative assumptions on the speed of diffusion may have drastically different implications for the evolution of the process. I then argue that this theoretical analysis helps provide some insight on existing empirical evidence; in particular, on the conditions under which relative stagnation or technological catch-up may arise and become consolidated among different economies.