Knowledge cumulability and path dependence in innovation persistence

Authored by: Crespi Francesco , Scellato Giuseppe

Routledge Handbook of the Economics of Knowledge

Print publication date:  December  2014
Online publication date:  December  2014

Print ISBN: 9780415640992
eBook ISBN: 9780203082324
Adobe ISBN: 9781136178658

10.4324/9780203082324.ch8

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Abstract

The theoretical and empirical assessment of the determinants of firm-level innovation persistence in time has important implications for our understanding of knowledge production processes, long-run industry dynamics, as well as for the evaluation of the expected impacts of specific policy tools to sustain innovative activities. The theme of innovation persistence in recent years has attracted the interest of scholars along different research perspectives, ranging from the economics of knowledge, to the economics of organization and the economics of innovation (Malerba et al., 1997; Cefis and Orsenigo, 2001; Peters, 2009; Antonelli et al., 2012; Clausen and Pohjola, 2013). Indeed, the theoretical reasoning about firm-level persistence of innovation activities is deeply rooted in the Schumpeterian view of industry dynamics. In the Schumpeter Mark I regime, technological change follows a process of creative destruction in which innovation creates just temporary monopoly power, with new and innovative firms replacing exiting firms. On the contrary, according to the Schumpeter Mark II regime, technological change is the outcome of a gradual process of technological accumulation. In particular, the cumulativeness of knowledge and its tacit component contribute to generate entry barriers, economies of scale and ‘success breeds success’ dynamics, leading to higher persistence of innovation (Malerba and Orsenigo, 1995).

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