31-10-2016, 11:46 AM
Innovation, qualitative change and economic development—Special
issue in honour of Pier-Paolo Saviotti
1462369217-Innovationqualitativechangeandeconomicdevelopment.pdf (Size: 139.46 KB / Downloads: 6)
Introduction
For many years, Paolo Saviotti has made key contributions
to the development of evolutionary economics.
Few people have been as active in promoting evolutionary
thought in economics, through his presenting, writing,
editing, hosting, supervising and mentoring work. This
issue of Structural Change and Economic Dynamics is a special
issue in honour of Paolo Saviotti and marks the occasion
of his 65th birthday.
Paolo has contributed to many theoretical and empirical
fields of enquiry. While it is difficult to summarise
the breadth and depth of his contribution, we highlight
three main intellectual branches, each of which
is firmly based on a neo-Schumpeterian view of the
economy as a self-transforming evolving system. This
short summary also serves as a rough guide for (young) scholars interested in learning more about his
work.
One branch of research which Paolo is perhaps most frequently
associated with, is his seminal contribution to the
product characteristics literature.Working with colleagues
at Manchester, he was a founding father of what has subsequently
come to be known as the ‘Manchester School’
of innovation. Paolo was the first to distinguish between
technical and service characteristics of products. Technical
characteristics are the focus of inventive activity by
firms while service characteristics are the object of interest,
and ultimately choice, by consumers (Saviotti andMetcalfe,
1984; Saviotti, 1988, 1996). Using the approach, Paolo constructed
a systematic theoretical and empirical research
program on the nature of innovation, the measurement of
product variety, and the mapping of the evolution of product
technologies along technological trajectories. Empirical
applications of Paolo’s ‘twin characteristics approach’ date
back to the first half of 1980s, with studies of tractors
(Gibbons et al., 1982), aircraft (Saviotti and Bowman, 1984),
and cars (Saviotti, 1985). These provided a platform for a
series of subsequent empirical studies by Paolo and other
authors that include helicopters (Saviotti and Trickett
1992), aircraft, helicopters, motorcycles and microcomputers
(Frenken et al., 1999), steam engines (Frenken and
Nuvolari, 2004), refinery processing (Nguyen et al., 2005),
the camera industry (Windrum, 2005) and a recent special
issue of the Journal of Evolutionary Economics (2009) that
was co-edited by Paolo (Fontana et al., 2009), and includes
studies of skis (Corrocher and Guerzoni, 2009), solar cells
(Haller and Grupp, 2009), cars (Los and Verspagen, 2009;
Alkemade et al., 2009), tanks (Castaldi et al., 2009) and
mobile phones (Windrum et al., 2009).
A second line of research in which Paolo has made
significant contributions (and which illustrates further
the distinctive neo-Schumpeterian perspective that underpins
his work) is the role of knowledge in innovation
and industrial dynamics. This line of research was mainly
pursued after he moved from Manchester to Grenoble
in the mid-nineties. Key contributions include theoretical
and empirical studies in the economics of knowledge
(Saviotti, 1998, 2004, 2007; Nesta and Saviotti, 2005,
2006; Grebel et al., 2006), innovation networks (Pyka and
Saviotti, 2002, 2005; Saviotti and Catherine, 2008), and
the role of mergers and acquisitions (M&As) for knowledge
management (Saviotti et al., 2005). This body of
work contributed to the role of codification and appropriability
conditions in industrial dynamics, the importance
of variety and coherence of knowledge bases, and the
evolution of R&D networks along an industry’s lifecycle.
The third line of Paolo’s research involves the development
of a theory of economic growth and structural
change based on the saturation of demand in old industry
sectors, and the creation of new sectors through
innovation. Here Paolo has been led by work of Luigi
Pasinetti on economic growth (Pasinetti, 1981, 1993), and
by the insights gained through his own work on product
characteristics (Saviotti and Metcalfe, 1984), variety
(Saviotti, 1996) and demand (Saviotti, 2001), which cumulated
into a family of simulation models (Saviotti and
Mani, 1995; Saviotti and Pyka, 2004a,b, 2008a,b), and a
first attempt at empirical validation (Saviotti and Frenken,
2008). Two key hypotheses have been put forward.
First, that growth in variety is a necessary requirement
for long-term economic development. Second, that the
growth of variety, leading to new sectors, and productivity
growth in pre-existing sectors, are complementary
and not independent aspects of economic development.
Throughout this research trajectory, these two hypotheses
have become more firmly based on micro-founded,
multi-sector industry life cycle models with selection of
firms being based on product competition in characteristics
space and price competition based on efficiency improvements.
The various contributions contained in this special issue
address various aspects of Paolo’s work. Here we consider
each contribution, in order of appearance.
The paper by Marengo and Valente provides a theoretical
contribution that is based on the NK-model by
Kauffman (1993). The model operationalises Paolo’s distinction
between technical and service characteristics,
enabling a useful representation of products and product
innovation to be obtained. By doing so, the authors can theorise about the effect of various search strategies on
product innovation and its effects on industrial dynamics.
With most innovation models still being limited to process
innovation (including those based on the NK-model),
this approach marks an important step forward. Although
the model in its present form remains rather stylised,
the framework clearly demonstrates the potential of the
NK-modelling approach for theorising about product innovation
and industrial dynamics.
Paolo’s emphasis on the role played by demand in innovation
is picked up in Witt’s paper. Witt adds an additional
dimension to Paolo’s research on product characteristics
and qualitative change, emphasising the subjective dimension
of consumers’ decisions and the mutual influences
that occur within groups of consumers. Symbolic consumption
and the possibilities of signalling go hand-in-hand
with particular consumption activities, leading to emergent
phenomena involving shared appreciations of specific
consumption patterns. Behind these emerging patterns,
Witt identifies the capacity of socially embedded cognitive
learning.
The Malerba and Orsenigo paper provides a model
of user–producer interactions, and their effect on the
dynamics of industry evolution. This is an elaboration of
their research history-friendly models in which there is
a co-evolution of component and final-product industries
(Malerba et al., 2008). The results show that, in general, the
gains from interactions tend to increase industrial concentration
and the rate of technical change. Yet the precise
effects are shown to depend on the nature of contractual
relationships between users and producers (length and
exclusivity)—an issue that is underexplored in evolutionary
models thus far. The model is rich in its results. One
important finding is that exclusive relationships tend to
constrain firms’ growth, technological change, and industry
concentration. The results also support the intuition that
long-term contracts better support user–producer relationships.
Roberto Fontana and Lionel Nesta pick up Paolo
Saviotti’s research on industrial dynamics and the role
played by knowledge, complementary assets, diversifi-
cation by innovation and selection. In their case study
on the Local Area Network Switch Industry they work
out the dynamics caused by early entry of small specialized
companies, the subsequent competitive advantage
of diversifying companies and the effects on firm survival
and exit this has. This study emphasis the important
role played by complementary assets for industry dynamics
as it can be found also in other industries (e.g. Pyka
and Saviotti, 2005 for biopharmaceuticals). The important
role of complementary capabilities manifests itself in the
co-existence of persistence of incumbent firms and the
novelty-driven emergence of new entrants which in some
cases in the long run could lead to a replacement of incumbents.
To detect the dynamics of knowledge production,
knowledge can be analyzed as a co-relational network
structure where proximity and distance effects affect
cross-fertilization of different areas of knowledge (Saviotti,
2009). Antonelli, Krafft and Quatraro in their contribution
to this Festschrift elaborate the knowledge network in information and communication technologies by focussing
on the international patent classification. The authors
show that the recombination of knowledge depends on
coherence and specialization. Those countries where ICT
industries are better in recombinant learning are characterized
by higher rates national multifactor productivity
growth.
Finally, the paper by Hartmann, Pyka and Hanusch
applies ‘Comprehensive Neo-Schumpeterian’ reasoning to
the catching up processes of Latin American economies.
Applying innovation theory to economic development in
the Southern hemisphere is a topic which Paolo Saviotti
has worked on for many years (e.g. Saviotti, 2003; Saviotti
et al., 2008; Saviotti and Nesta, 2009). In the theoretical
part of their paper, Hartmann, Pyka and Hanusch
take the Neo-Schumpeterian approach, which has largely
been developed with Western economies in mind, and
integrate it with Amartya Sen’s capability approach. The
authors proceed to highlight co-evolutionary relationships
between institutional, socio-economic and technological
development. The empirical analysis indicates that
varieties of future-orientation that can be found in
Latin America. The results of their cluster analysis support
the development and application of different policy
strategies, which may support and trigger development
processes in various Latin countries with similar structures.