The Theory of Technological Competition

It is not self-evident that economists ought to engage in the task of explaining the characteristics of technological innovations. It is even less evident that development and inventive activities are related to the structure of economic organisations. Or so it would seem from the near-complete absence of a discussion of such issues in resource- allocation theory.2 So would it seem, as well, from the sheer volume of effort that has been spent over the past quarter of a century in trying to demonstrate that economic forces are a prime architect of technological change.3 If there is a single driving force behind these empirical investigations, it is the writings of Joseph Schumpeter (most especially perhaps his Capitalism, Socialism and Democracy, Schumpeter, 1976). Since recent developments in the theory of technological competition have addressed a few of the empirical findings, they reflect this heritage as well.