1st Edition

The Economics of Innovation

    1920 Pages
    by Routledge

    The Economics of Innovation is a new title in the Routledge Major Works series, Critical Concepts in Economics. Edited by Cristiano Antonelli, a leading scholar in the field, it is a four-volume collection of canonical and the best cutting-edge research.

    Many would argue that the economics of innovation is founded on the work of Joseph Schumpeter (1883–1950), though its origins can also be traced to the writings of Adam Smith (1723–90) and Karl Marx (1818–83). In modern, knowledge-based economies, characterized by rapid innovation, interest in the area has exploded in recent decades and innovation economics is increasingly the object of professional and highly specialized research. The resultant body of scholarly literature is characterized by its multiplicity of perspectives from within economics, and, indeed, across the social sciences as a whole. Furthermore, methodologies borrowed from the natural sciences, such as epidemiology, life-cycle analysis and Darwinian evolution, have also contributed to recent advances. The sheer scale of the growth in the research corpus - and the breadth of the field - makes this collection especially timely and welcome.

    Volume One Innovation and Growth: The Classical Legacy brings together material from and about the foundational sources of the classical analysis of the endogenous determinants of technical change, with the writings of Smith and Marx providing the two key points of departure. Volume Two Innovation and Competition: The Schumpeterian Legacy collects key research following the work of Kenneth J. Arrow (b. 1921), in particular his two 1962 papers on the economics of learning and the economics of knowledge.

    Schumpeter’s contribution to the economics of innovation is unparalleled. A key definition of innovation; an understanding of the concentration of innovation in time and space with the notion of ‘gales of creative destruction’; and the analysis of the fundamental role of the corporation are all based on his thinking. Volume Three Innovation and Knowledge: The Arrovian Legacy brings together the best - and most influential - work produced in Schumpeter’s wake.

    The material collected in Volume Four Innovation and Complexity elaborates a single approach where innovation is considered as a key emergent property of an economic system recognized as both dynamic and complex, i.e. constituted by heterogeneous components that interact and change both the architecture and the performance of the whole. In this approach innovation is the result of a path-dependent, collective process that takes place in a localized context, if, when and where a sufficient number of creative reactions are made in a coherent, complementary and consistent way. Broadly speaking, this approach is the result of the integration of the strands of analysis identified in the preceding three volumes within the new emerging paradigm of complexity.

    With a comprehensive introduction, newly written by the editor, which places the collected material in its historical and intellectual context, The Economics of Innovation is an essential collection destined to be valued by scholars and students as a vital research resource.

    Volume I: Innovation and Growth: The Classical Legacy

    General Introduction

    1. R. M. Solow, ‘Technical Change and the Aggregate Production Function’, Review of Economics and Statistics, 39, 3, 1957, pp. 312–20.

    2. N. Rosenberg, ‘Adam Smith on the Division of Labour: Two Views or One?’, Economica, 32, 126, 1965, pp. 127–39.

    3. J. Schmookler, ‘The Level of Inventive Activity’, Review of Economics and Statistics, 36, 2, 1954, pp. 183–90.

    4. N. Rosenberg, ‘Economic Experiments’, Industrial and Corporate Change, 1, 1, 1992, pp. 181–203.

    5. N. Rosenberg, ‘The Direction of Technological Change: Inducement Mechanisms and Focusing Devices’, Economic Development and Cultural Change, 18, 1, 1969, pp. 1–24.

    6. W. Fellner, ‘Two Propositions in the Theory of Induced Innovation’, Economic Journal, 71, 282, 1961, pp. 305–8.

    7. H. P. Binswanger, ‘Induced Technical Change: Evolution of Thought’, in H. P. Binswanger and V. W. Ruttan (eds.), Induced Innovation: Technology Institutions and Development (1978), pp. 13–43.

    8. D. Acemoglu, ‘Why Do New Technologies Complement Skills? Directed Technical Change and Wage Inequality’, Quarterly Journal of Economics, 113, 4, 1998, pp. 1055–89.

    9. A. B. Atkinson and J. E. Stiglitz, ‘A New View of Technological Change’, Economic Journal, 79, 315, 1969, pp. 573–8.

    10. P. M. Romer, ‘The Origins of Endogenous Growth’, Journal of Economic Perspectives, 8, 1, 1994, pp. 3–22.

    11. P. Aghion and P. Howitt, ‘A Model of Growth Through Creative Destruction’, Econometrica, 60, 2, 1992, pp. 323–51.

    12. R. R. Nelson and S. G. Winter, ‘Growth Theory From an Evolutionary Perspective: The Differential Productivity Puzzle’, American Economic Review, 65, 2, 1975, pp. 338–44.

    13. T. F. Bresnahan and M. Traitenberg, ‘General Purpose Technologies: "Engines of Growth"?’, Journal of Econometrics, 65, 1995, pp. 83–108.

    14. R. Lipsey, C. Bekar, and K. Carlaw, ‘What Requires Explanation?’, in E. Helpman (ed.), General Purpose Technologies and Economic Growth (1998), pp. 15–54.

    15. P. A. David, ‘The Dynamo and the Computer: A Historical Perspective on the Modern Productivity Paradox’, American Economic Review, 80, 2, 1990, pp. 355–61.

    Volume II: Innovation and Competition: The Schumpeterian Legacy

    16. Z. J. Acs and D. B. Audretsch, ‘Innovation in Large and Small Firms: An Empirical Analysis’, American Economic Review, 78, 4, 1998, pp. 678–90.

    17. W. J. Baumol, ‘Entrepreneurial Enterprises, Large Established Firms and Other Components of the Free-Market Growth Machine’, Small Business Economics, 23, 2004, pp. 9–21.

    18. R. R. Nelson, ‘The Simple Economics of Basic Scientific Research’, Journal of Political Economy, 67, 3, 1959, pp. 297–306.

    19. J. Cantwell and B. Andersen, ‘A Statistical Analysis of Corporate Technological Leadership Historically’, Economics of Innovation and New Technology, 4, 3, 1996, pp. 211–34.

    20. S. Haneda and H. Odagiri, ‘Appropriation of Returns from Technological Assets and the Values of Patents and R&D in Japanese High-Tech Firms’, Economics of Innovation and New Technology, 7, 4, 1998, pp. 303–21.

    21. F. M. Scherer, ‘Research and Development Resource Allocation Under Rivalry’, Quarterly Journal of Economics, 81, 3, 1967, pp. 359–94.

    22. P. Dasgupta and J. E. Stiglitz, ‘Industrial Structure and the Nature of Innovative Activity’, The Economic Journal, 90, 358, 1980, pp. 266–93.

    23. P. Stoneman and N. Ireland, ‘The Role of Supply Factors in the Diffusion of New Process Technology’, Economic Journal, 93, 1983, pp. 66–78.

    24. C. Antonelli, ‘Investment and Adoption in Advanced Telecommunications’, Journal of Economic Behavior and Organization, 20, 1993, pp. 227–45.

    25. M. L. Katz and C. Shapiro, ‘Technology Adoption in the Presence of Network Externalities’, Journal of Political Economy, 94, 41, 1986, pp. 822–41.

    26. C. Antonelli, ‘Diffusion as a Process of Creative Adoption’, Journal of Technology Transfer, 31, 2006, pp. 211–26.

    27. K. Pavitt, ‘Sectoral Patterns of Technical Change: Towards a Taxonomy and a Theory’, Research Policy, 13, 1984, pp. 343–73.

    28. F. Malerba and L. Orsenigo, ‘Schumpeterian Patterns of Innovation’, Cambridge Journal of Economics, 19, 1995, pp. 47–65.

    29. W. J. Abernathy and K. B. Clark, ‘Mapping the Winds of Creative Destruction’, Research Policy, 14, 1985, pp. 3–22.

    30. R. M. Henderson and K. B. Clark, ‘Architectural Innovation: The Reconfiguration of Existing Product Technologies and the Failure of Established Firms’, Administrative Science Quarterly, 35, 1990, pp. 9–30.

    Volume III: Innovation and Knowledge: The Arrovian Legacy

    31. N. Rosenberg, ‘Karl Marx and the Economic Role of Science’, Journal of Political Economy, 82, 4, pp. 713–28.

    32. K. J. Arrow, ‘Economic Welfare and the Allocation of Resources for Invention’, in R. R. Nelson (ed.), The Rate and Direction of Inventive Activity: Economic and Social Factors (1962), pp. 609–25.

    33. P. Dasgupta and P. A. David, ‘Towards a New Economics of Science’, Research Policy, 23, 1994, pp. 487–521.

    34. A. Pakes and Z. Griliches, ‘Patents and R&D at the Firm Level’, Economic Letters, 5, 1980, pp. 377–81.

    35. P. Mohnen, J. Mairesse, and M. Dagenais, ‘Innovativity: A Comparison Across Seven European Countries’, Economics of Innovation and New Technology, 15, 4/5, 2006, pp. 391–413.

    36. A. B. Jaffe, ‘Technological Opportunity and Spillovers of R&D: Evidence from Firms’ Patents, Profits and Market Value’, American Economic Review, 76, 5, 1986, pp. 984–1001.

    37. Z. Griliches, ‘The Search for R&D Spillovers’, Scandinavian Journal of Economics, 94, 1992, pp. S29–S47.

    38. M. Feldman, ‘The New Economics of Innovation, Spillovers and Agglomeration: A Review of Empirical Studies’, Economics of Innovation and New Technology, 8, 1999, pp. 5–25.

    39. F. Malerba, ‘Learning by Firms and Incremental Technical Change’, Economic Journal, 102, 413, 1992, pp. 845–59.

    40. K. J. Arrow, ‘Classificatory Notes on the Production and Transmission of Technical Knowledge’, American Economic Review, 59, 2, 1969, pp. 29–35.

    41. E. Mansfield, M. Schwartz, and S. Wagner, ‘Imitation Costs and Patents: An Empirical Study’, Economic Journal, 91, 364, 1981, pp. 907–18.

    42. W. M. Cohen and D. A. Levinthal, ‘Absorptive Capacity: A New Perspective on Learning and Innovation’, Administrative Science Quarterly, 35, 1, 1990, pp. 128–52.

    43. R. R. Nelson, ‘The Role of Knowledge in R&D Efficiency’, Quarterly Journal of Economics, 97, 3, 1982, pp. 453–70.

    44. F. A. Hayek, ‘The Use of Knowledge in Society’, American Economic Review, 35, 4, pp. 519–30.

    45. E. Von Hippel, ‘The Dominant Role of Users in the Scientific Instrument Innovation Process’, Research Policy, 5, 1976, pp. 212–39.

    46. D. J. Teece, ‘Profiting from Technological Innovation: Implications for Integration, Collaboration, Licensing and Public Policy’, Research Policy, 15, 1986, pp. 285–305.

    47. A. Arora and A. Gambardella, ‘The Changing Technology of Technical Change: General and Abstract Knowledge and the Division of Innovative Labor’, Research Policy, 23, 1994, pp. 523–32.

    48. P. P. Patrucco, ‘The Emergence of Technology Systems: Knowledge Production and Distribution in the Case of the Emilian Plastics District’, Cambridge Journal of Economics, 29, 2005, pp. 37–56.

    49. A. Arora, ‘Licensing Tacit Knowledge: Intellectual Property Rights and the Market for Know-How’, Economics of Innovation and New Technology, 4, 1995, pp. 41–59.

    50. M. Trajtenberg, R. Henderson, and A. Jaffe, ‘University Versus Corporate Patents: A Window on the Basicness of Invention’, Economics of Innovation and New Technology, 5, 1995, pp. 19–50.

    51. J. D. Adams, ‘Learning, Internal Research, and Spillovers’, Economics of Innovation and New Technology, 15, 2006, pp. 5–36.

    52. C. Freeman, ‘Networks of Innovators: A Synthesis of Research Issues’, Research Policy, 20, 1991, pp. 499–514.

    53. P. Patel and K. Pavitt, ‘National Innovation Systems: Why They are Important and How They Might be Measured and Compared’, Economics of Innovation and New Technology, 3, 1994, pp. 77–95.

    54. P. A. Gompers and J. Lerner, ‘The Venture Capital Revolution’, Journal of Economic Perspectives, 15, 2, 2001, pp. 145–68.

    55. C. Antonelli, ‘The Business Governance of Localized Knowledge: An Information Economics Approach to the Economics of Knowledge’, Industry and Innovation, 13, 3, 2006, pp. 227–61.

    Volume IV: Innovation and Complexity

    56. Z. Griliches, ‘Hybrid Corn: An Exploration in the Economics of Technological Change’, Econometrica, 25, 4, 1957, pp. 501–22.

    57. W. J. Utterback and J. M. Abernathy, ‘A Dynamic Model of Process and Product Innovation’, Omega, 3, 6, 1975, pp. 639–56.

    58. L. L. Soete and R. Turner, ‘Technology Diffusion and the Rate of Technical Change’, Economic Journal, 94, 375, 1984, pp. 612–23.

    59. H. A. Simon, ‘Rational Decision Making in Business Organizations’, American Economic Review, 69, 4, 1979, pp. 493–512.

    60. C. Antonelli, ‘A Failure Inducement Model of Research and Development Expenditure: Italian Evidence from the Early 1980s’, Journal of Economic Behavior and Organization, 12, 1989, pp. 159–80.

    61. R. R. Nelson and S. G. Winter, ‘In Search of a Useful Theory of Innovation’, Research Policy, 6, 1977, pp. 36–76.

    62. B. J. Loasby, ‘The Organization of Capabilities’, Journal of Economic Behaviour and Organization, 35, 1998, pp. 139–60.

    63. G. Dosi, ‘Technological Paradigms and Technological Trajectories: A Suggested Interpretation of the Determinants and Directions of Technological Change’, Research Policy, 11, 1982, pp. 147–62.

    64. G. Silverberg, G. Dosi, and L. Orsenigo, ‘Innovation Diversity and Diffusion: A Self-Organisation Model’, Economic Journal, 98, 393, 1988, pp. 1032–54.

    65. J. B. Rosser, ‘On the Complexities of Complex Economic Dynamics’, Journal of Economic Perspectives, 13, 4, 1999, pp. 169–92.

    66. J. Foster, ‘From Simplistic to Complex Systems in Economics’, Cambridge Journal of Economics, 29, 2005, pp. 873–92.

    67. S. N. Durlauf, ‘Complexity and Empirical Economics’, Economic Journal, 115, 2005, pp. F225–43.

    68. P. A. David, ‘Why are Institutions the "Carriers of History"?: Path Dependence and the Evolution of Conventions, Organizations and Institutions’, Structural Change and Economic Dynamics, 5, 2, 1994, pp. 205–20.

    69. B. Arthur, ‘Competing Technologies, Increasing Returns and Lock-In by Historical Events’, Economic Journal, 99, 394, 1989, pp. 116–31.

    70. P. A. David, ‘Clio and the Economics of QWERTY’, American Economic Review, 75, 2, 1985, pp. 332–7.

    71. D. C. North, ‘Some Fundamental Puzzles in Economic History’, in W. B. Arthur, S. N. Durlauf, and D. Lane (eds.), The Economy as an Evolving Complex System II (1997), pp. 223–37.

    72. J. Mokyr, ‘Punctuated Equilibria and Technological Progress’, American Economic Review, 80, 2, 1990, pp. 350–4.

    73. J. S. Metcalfe, J. Foster, and R. Ramlogan, ‘Adaptive Economic Growth’, Cambridge Journal of Economics, 30, 2006, pp. 7–32.

    74. C. Antonelli, ‘The Economics of Path-Dependence in Industrial Organization’, International Journal of Industrial Organization, 15, 1997, pp. 643–75.

    75. C. Antonelli, ‘The System Dynamics of Collective Knowledge: From Gradualism and Saltationism to Punctuated Change’, Journal of Economic Behavior and Organization, 62, 2007, pp. 215–36.

    76. P. Krugman, ‘Complex Landscapes in Economic Geography’, American Economic Review, 84, 2, 1994, pp. 412–16.

    77. D. A. Lane and R. Maxfield, ‘Foresight Complexity and Strategy’, in W. B. Arthur, S. N. Durlauf, and D. A. Lane (eds.), The Economy as an Evolving Complex System II (1997), pp. 169–98.

    78. K. J. Arrow, ‘Increasing Returns: Historiographic Issues and Path Dependence’, European Journal of History of Economic Thought, 7, 2, 2000, pp. 171–80.


    Cristiano Antonelli holds the chair of Political Economy of the University of Torino where he is Director of the Department of Economics and Dean of the Masters Programme in Communication and Society. He also runs the Laboratorio di Economia dell’Innovazione. He is also President of the International Center for Economic Research (ICER).

    He is the managing editor of the T&F journal Economics of Innovation and New Technology (since 1996) and a member of the Board of Information Economics and Policy (associate editor in 1995–2004); Mind & Society; and Communication & Strategies. He is the co-editor of the Kluwer series ‘Economics of Science Technology and Innovation’ (since 1994).

    He has been visiting professor in the Universities of Paris Sud, Paris XIII, Lyon Lumiere, Nice, Paris-Dauphine, Aix-en-Provence, Manchester and Rio de Janeiro. He has been Vice-President of the International Schumpeter Society in the years 2000–4, and member of the Board of Directors of Telecom Italia, on behalf of the Italian Treasury in the privatization period (1998–9), of the Scientific Board of Confindustria (1998–2000) and of the Scientific Board of ENEA (1999–2003). He was awarded a Rockefeller fellowship, at the Sloan School of the MIT, for the years 1983–5. He served as a junior economist the Directorate for Science Technology and Industry of the OECD in 1978 and 1979.