Work

Growing by Leaps and Inches: Creative Destruction, Real Cost Reduction, and Inching Up

Year: 2002

Type: article

Abstract: Most firms achieve perfective progress, incrementally improving commodities or productivity.But technological progress is concentrated in a few firms achieving metamorphic progress: forming or transforming industries with technological breakthroughs (e.g., biotechnology, lasers, semiconductors, nanotechnology).Unless congruent with incumbents' science and technology base, metamorphic progress promotes entry.Scientific breakthroughs embodied in discovering scientists, protected by natural excludability, and transferred by learning-by-doing-with at the bench generally drive metamorphic progress.Embodied knowledge is rivalrous and leads to entry and industry dominance by star-scientist-linked firms.Incorporating this scientific-entrepreneurial process is essential to improving -if not transforming -endogenous growth models.

Source: Economic Inquiry

DOI: 10.1093/ei/41.1.1

Authors: Michael R. Darby, Lynne G. Zucker

Institutions: National Bureau of Economic Research, University of California, Los Angeles

Language: English

Topic: Firm Innovation and Growth

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Industry, innovation and infrastructure

Open Access status: green

Funder: Alfred P. Sloan Foundation