Continuity and Competition in Technological Development

Recent thinking about technical change has been strongly influenced by the theoretical work of Joseph Schumpeter. As we have seen in the previous chapter, most analyses of innovation, since Schumpeter, have considered innovation as a somewhat momentous, discrete event made possible by a prior invention and drawn into economic significance by a process of diffusion.1 Moreover, these analyses have focussed primarily upon the hardware aspect of innovation in that they have given prominence to artifacts that is, to the things that have been made. For present purposes this approach has two significant shortcomings: it fails to recognise first that innovations are rarely fully developed when they are first introduced and second that their full economic significance depends upon the continued development of the original innovations during a period following their introduction to the market-place. Both these shortcomings direct our attention to a process that we have described as post-innovation improvement and, in our framework, these improvements are of overriding importance. It is not the initial event but rather the subsequent sequence of interrelated innovations which distinguish the important from the economically inconsequential in the realm of technological development.2