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This dissertation studies the effect of scientific discoveries, regulation, and changes in market access on the American and Japanese brewing industries over the nineteenth and twentieth centuries. Breweries adapted to these shocks by switching to new technologies, products, and geographical markets. In the long run, this adaptation process shaped the structure of the brewing industry and introduced competition and new production techniques in the soft-drink and biotechnology industries. Using detailed data at the brewery-level, coupled with natural experiments, I study the repercussions of this adaptation mechanism across industries and over time.In the first chapter, I study how private trade costs affect the relocation of industries in response to market integration. I focus on the relocation of the American brewing industry during the late nineteenth century, when migration and the expansion of the American railroad network reduced the costs of reaching consumers troughout the US. Using a brewery-level database that I constructed, I show that the endogenous adoption of bottling --a private reduction in marginal trade costs that required the payment of a one-time cost-- amplified the effect of market integration on the relocation of the brewing industry from the East Coast to the Midwest of the United States.In the second chapter, I study whether early exposure to demand reductions improves the performance of firms during future demand shocks. I focus on the American brewing industry during prohibition in the early twentieth century. Some breweries faced early reductions in demand when nearby counties introduced prohibition at the local level. Other breweries were insulated from local prohibitions until the start of federal prohibition, when the entire US prohibited the production and distribution of alcoholic drinks. I follow 1,300 breweries throughout both local and federal prohibitions, using firm-level data that I collected. Breweries that faced early reductions in demand were 12\% more likely to survive the full prohibition period, from before local prohibition until the end of federal prohibition, than breweries that did not face early reductions in demand. This increase in survival occurred because a group of breweries made early investments in machinery that later facilitated product switching into soda and other foodstuffs.The third chapter is coauthored with Michael Darby and Lynne Zucker. Scientists affiliated to Japanese breweries authored 81\% of the academic articles produced by breweries all over the world between 2000 and 2005 --50 percentage points more than twenty years earlier. Most of this increase in academic production occurred between 1986 and 1996, when the number of published articles affiliated to Japanese breweries increased sixfold. We show that this increase in academic production is the result of product diversification towards the pharmaceutical and biochemical sectors in which collaboration with academic scientists is common. Product diversification was possibly driven by reductions of barriers to entry in the Japanese market for beer. Diversification and innovation became persistent over time because the new sectors were intensive in knowledge that was tacit and therefore excludable.

From the perspective of the study of biological metaphor analysis, this article intends to explore a "high-quality" regional economic development path that fits the context of the economic transition period. This article first introduces the definition of biological metaphors in evolutionary economics. Second, analyzed the inherent logic of the biological metaphor of technological innovation and industrial evolution, and found that the concept of green development must be integrated into the technological innovation process of individual enterprises at the current stage in order to achieve the transformation and upgrading of the current industrial structure. Third, taking Jiangxi Province as an example, the theoretical framework of biological metaphors for creating a beautiful "Jiangxi model" in China was discussed, and the current state of industrial evolution, technological innovation, and environmental regulation in Jiangxi Province from 2011 to 2017 were described in detail. The rationality of the theoretical framework for the analysis of biological metaphors to create a beautiful Jiangxi model in China, that is, it is suitable for the needs of industrial development in Jiangxi Province. Finally, corresponding policy recommendations are given based on the relevant conclusions.

The integration of evolutionary economics into economic geography has revitalized research interests in the spatial emergence of new industries and industrial evolution of regions (Boschma and Lambooy 1999; Neffke et al. 2011; Boschma and Minondo 2012; Isaksen 2014). It is argued that regions often evolve through a process of creative destruction (Schumpeter 1934; Garud and Karnoe 2001). On the one hand, regional industrial evolution is path-dependent. The emergence of new industries is determined by a set of competences and assets accumulated at the local level, and previous experience may affect the emergence and performance of these new industries (Buenstorf and Klepper 2009; Klepper and Simons 2000). Recent studies show that new industries evolve out of preexisting regional industrial structures and technological relatedness among industries affects the ways in which regions create new industries over time (Boschma and Frenken 2011; Neffke et al. 2011).

The uneven revitalisation of some North American manufacturing industries calls attention to the challenges and opportunities facing historical industry core regions. Yet policy prescriptions routinely overlook industry- and place-specific factors that enable or restrict the viability of manufacturing over time. We re-engage Markusen’s profit-cycle model of industrial evolution and dispersion, presenting updated metrics of U.S. manufacturing industry restructuring over three decades, and demonstrating the uneven ways that historical core regions remain vital. Through the critical case of the turbulent computer industry, we show that combining industry trends with scrutiny of firm, technological, place and market contingencies can explain policy-relevant differences in regional industrial fortunes.

Purpose of the paper : Considering the renewed interest in manufacturing, the paper offers a reinterpretation of the co-evolution between the production system and work organization in the manufacturing sector. Methodology : The paper examines the evolution of the relationships between manufacturing and work organization through a reasoned review of the existing literature. Findings : The article identifies the most recent discontinuities that are driving both manufacturing and work organization towards a new paradigm shift. In addition, the article contributes to the existing literature by analyzing the current debate that reveals an interesting research agenda devoted to manufacturing and work organization. Research limits : The most visible limitation of this contribution is related to the lack of feedback on an important factor involved in the development of any industrial economic production system, the industrial policy of governments. Practical implications : The contribution raises some issues of particular relevance about the Italian lack of innovation in work organization, which requires particular attention by Human Resources Managers. Originality of the paper : The article offers a reinterpretation of the symbiotic evolution of manufacturing and work organization adopting the perspective of the noted philosopher Gianbattista Vico, by delineating different stages of this evolution, and by combining this with the existing literature in the two areas.

The notion of disruptive technologies has become in recent years a prominent concept in industrial dynamics and strategy. Yet, we still know too little about the frequency, intensity and modalities of this crucial phenomenon, let alone about the implications for strategy and policy making. There are indeed various meanings and interpretations of this concept, in the literature and in practice, but they often lack generality and in most instances theories rely on a quite narrow set of specific cases of particular firms, products and industries. This paper will not review the details of this debate. Rather, some more basic issues are discussed about the intensity and forms of disruptive innovation and the strategies and reactions of incumbents to the threats presented by new technologies. The paper presents and discusses the various meanings and forms of this concept as well as the conflicting evidence coming from different sources and methodologies in order to clarify its relevance and the differentiated ways in which it appears (or it doesn’t appear), thus providing very preliminary and basic indications for analysis and action. The paper concludes that in the aggregate and over time what we observe is a puzzling co‐existence and turbulence and stability in industrial dynamics, which appears to be driven by the complex interplay of differentiated processes of market selection and – above all – learning within firms. The specific characteristics of the relevant technologies, markets and firms are fundamental determinants of the patterns of competition and industrial change and they have to be considered carefully in the development of theories, strategies and policies.

The knowledge economy plays a leading role in current socioeconomic development and has changed industrial development. This study addresses whether changes in industrial development have improved the knowledge innovation, technical level, and productive efficiency of industries. Taiwanese industries were typically labor and technology-intensive and policy-oriented manufacturing industries in the past. This study analyzes the change in the spatial distribution of industries in southern Taiwan, and further examines the effect of knowledge interactions between industries and the region on industrial development, as well as the restrictions and opportunities for future development. Industries in southern Taiwan have formed a solid foundation based on policies promoted in the past. Nevertheless, an over-reliance on policy guidance has impeded breakthroughs and motivation to learn. Analytical results indicate that industries with stable and changing clusters achieve sustainable economic growth by creating links for innovative knowledge interactions through collaboration with suppliers and competitors. Accordingly, knowledge sources depend not only on internal research and development but also on external interactions to stimulate innovation. Restated, the input of key knowledge generates a high output, provides opportunities for industry transformation, and decreases resource consumption to achieve environmental sustainability during development. Additionally, the ripple effect of innovation, research, and development enhances structural evolution in industries, generating sustainable economic development.

Qi, X. and Xiao, W., 2019. Identifying the evolutionary path of maritime industries from the perspective of supernetwork. In: Hoang, A.T. and Aqeel Ashraf, M. (eds.), Research, Monitoring,...

Background IE as a field studies systems that consist of a myriad of interconnected environmental, social, economic and technical systems. People, machines, organization, the bio-geo-chemical environment, infrastructures, markets, laws and habits form a complex adaptive socio-technical system, evolving through constant parallel and distributed interaction of heterogeneous social and technical elements. Understanding and shaping this evolution is essential if we are to rise to the challenges of climate change, resource scarcity, population growth and world peace. These system can be characterized as Complex Adaptive Systems, which John H. Holland [8] defines as

The industrial structure strategy in China has to change to adjust new requirements, because of the economic development, industrial evolution, the policy of energy saving and greenhouse gas emissions constraints. This paper aims to explaining the relationships between the industrial structure and carbon intensity, the regional differences between provinces in China based on recent economic data, including internal industry structure, carbon emissions, industrial carbon productivity in different industry in 2001-2010 in China. The case in this paper mainly focuses on Tianjin, China. In this case, industry influent coefficient and industry carbon emission influent coefficient are measured. Meanwhile, four different categories are divided by measurement values, such as Low-impact and High-Carbon Emission Industry Sectors, Low-impact and Low-Carbon Emission Industry Sectors, High-Impact High-Carbon Emission Industry Sectors, High-Impact Low-Carbon Emission Industry Sectors. The important industry sectors and its development strategy in Tianjin are proposed and the priori analysis to the macroeconomic influence by industrial structure adjustment is given later. The results of priori analysis showed that: the important industry and its development strategy can reduce the carbon emission combining with several policies. The proposed policies in last part of this paper include Industry Sectors Adoption Policy, Industry Layout Policy, Financial Policy, Environment Policy, technology Policy, Energy Efficiency Policy, and Industry Association Policy in the low-carbon development constraints. Key words: Industry structure adjustment, optimized path, industrial influent index, Industrial carbon emission influent index, Tianjin

A standard presumption in empirical research on the origin of economic growth has been that economic development has to be preceded by technological development. This is however only part of a more complex story of long-term industrial evolution, which on close inspection turns out to be more economic and cultural than it is technological. The nature, existence, and magnitude of positive externalities (or spillovers) from advanced industrial development projects and specifically about technological spillovers emanating from military product development are therefore addressed in this chapter as a potential instrumentation of growth policy, hence the subtitle of the book, Public Procurement as Innovation Policy.

The paper reconstructs the conception of the Russian industrial evolution proposed by A. Korsak (1832-1874) who was a founder of the historical tradition in Russian political economy and the first Russian scholar who used a category "industrial revolution". The author shows Korsak's contribution to the analysis of the distinguishing features and institutions of Russian agriculture and manufacturing originating from national geography and history. The paper emphasizes elements of Korsak's conception that predicted both Marx's generalization of the stages of capitalist mode of production and research of German "Young" Historical School of political economy. The author considers Korsak's heritage in a broad context of Russian intellectual history, including main political economy debates of the 19th century.

This paper analyses the contribution made by evolutionary processes to the organisation of economic activity which is designed to create and sustain a competitive advantage, and to the competitiveness of companies in a dynamic and changing environment.

The article addresses the dynamics through which product markets become derailed from early product life cycle (PLC)-tracks and engaged in complementary convergence with other product markets or industries. We compare and contrast the theories that can explain, respectively, the PLC and the derailing of this cycle into a process of complementary convergence. The article challenges the standard industry conception and proposes a distinction between the emergent industrial sector, the emergent product market (or niche) and the industry as a more well-established entity. Based on empirical evidence from the IT security sector, two trajectories of complementary convergence are identified, "lower-order integration", the integration of different product markets in a sectoral context, and "higher-end integration", the integration of product markets into the offerings of established industries. While young ventures dominate lower-order integration, incumbents in established industries dominate higher-order integration. For both trajectories mergers and acquisitions represent a central means for realizing convergence. Copyright 2011 The Author 2011. Published by Oxford University Press on behalf of Associazione ICC. All rights reserved., Oxford University Press.

This article argues that in its “canonical” form, the path dependence model, with its core concept of lock-in, affords a restrictive and narrowly applicable account of regional and local industrial evolution, an account moreover that is tied to problematic underpinnings based on equilibrist thinking. As such, the canonical path dependence model actually stresses continuity rather than change. The article explores recent developments in political science, in which there have been active attempts to rethink the application of path dependence to the evolution of institutions so as to emphasize change rather than continuity. These developments are used to argue for a rethinking of path dependence ideas in economic geography.

In this article, industrial evolution is driven by endogenous technology choices of firms, generating a rich environment that includes the possibility of a dramatic shakeout. The likelihood, magnitude, and timing of this shakeout are characterized and depend not only on the size of an innovation but also on cost structure. In this setting, trade liberalization reduces the likelihood of a shakeout, resulting in more stable industrial structures. However, when shakeouts arise in global markets, the distribution of exits can vary widely across countries. Furthermore, conditions exist where a shakeout occurs in a closed economy but not in an open economy.

Technological innovation is widely considered as one of the major determinants of industrial evolution and corporate change. The distinction between competence enhancing and competence destroying innovation provides a suggestive theoretical link between technological change and the dynamics of organizational populations and industries. Yet, empirical evidence in support of this theoretical distinction is relatively weak, and agreement is still lacking about the long-term consequences of technological innovation for the demography of corporations and industries. In this paper we use data collected on the evolution of the motorcycle manufacturing industries in Great Britain, Germany, France and Italy during the period 1895 and 1993 to analyze the relationship between innovation and demographic rotation in organizational populations. The findings that we report corroborate selected aspects of the theoretical distinction between competence-enhancing and competence-destroying innovation. While we find the survival experience of organizations in different countries to be roughly similar, we also discover relevant elements of differentiation across them with respect to radical technological innovation, and to the competitive experience of incumbent companies.

This research focuses on analyzing the two prime science and technology (S&T) strategy approaches for industrial evolution based on the concept of S&T gap, namely, the optimist and pragmatist approaches. Particularly, the cases of global IC, pharmaceutical, and computer industries, are used to make cross-national and cross-industrial comparison of these two approaches. The optimist approach is developed based on the product life cycle theory which envisions technology transcending everyday limitations. With this perspective, market demand is the most critical factor in selecting the S&T strategy approaches. The pragmatist approach is formed based on the new trade theory which recognizes the power of science and technology but seeks to fit it into structures that already exist, and government must manage resources pouring into science and technology. Case studies of global IC, pharmaceutical, and computer industries during the 2nd half of the 20th century are used as research targets to reflect policy impacts on the technological evolution. The results of this study reveal that, strategy approaches have to be adapted and turned to the specific stage, technology level, and market segment that have been selected for intervention. This result of comparison also offers the criteria of strategy selection for developing different industry based on distinct national base.

An industry typically experiences initial mass entry and later shakeout of producers over its life cycle. However, the timing of the evolution varies substantially across markets. By exploring the dynamic interactions between technology progress and demand diffusion, our theory suggests that the cross-market differences of industrial evolution are largely the result of underlying demand factors. Particularly, higher consumer income or larger market size tends to drive faster demand diffusion and earlier industry shakeout. A comparative study on the US and UK television industries supports the theoretical findings.

In the evolution of the Taiwanese steel industry, the behavior of steel firms – both in the micro-perspective of firm-level behavior and in the macro-perspective of industry-level behavior – has played a complicated role in ensuring the effectiveness of the government's industrial policies. Using a hybrid method in the context of the Taiwanese steel industry during 1970 – 1996, this study aims to explore the ‘black box’ of how policy measures engender influences on the two levels of behavior and consequently on firm performance. The firm-level survey not only shows that steel firms dynamically adjusted both their strategic capabilities internally and their competitive conduct externally in response to industrial evolution but also confirms the linkages between firms’ attitudes toward policy measures and their behavior patterns, which lead to performance differentials within a specific period of time. The results of the industry-level analysis indicate that the collective production behavior in th...

The role of Darwinist concepts in evolutionary economics has long been a contentious issue. The controversy has recently been rekindled by the proposal of a “Universal” or “generalized” Darwinism, which holds that the ontology of all evolutionary systems accords to the Darwinist scheme of variation, selection and inheritance. This paper focuses on the application of the generalized Darwinist framework to the analysis of markets and industries. It argues that selection and inheritance concepts narrowly construed after the biological example are of limited usefulness. As an alternative to the ‘top–down’ approach of Universal Darwinism, the development of ‘bottom–up’ theories is advocated.

This article examines the development of the game industry in Japan and South Korea with particular attention to the role of the government in fostering a creative industrial sector. Although the Japanese game industry achieved market-oriented growth until the 1990s, the government's involvement in the industry became salient after the new millennium. Games were positioned as main sources for creating internationally competitive media contents, and the government has provided environments where innovative companies and individuals can develop their skills and expertises and intensified the protection of intellectual property rights overseas. Unlike Japan, the development of the game industry was sustained by intensive government intervention in South Korea. The government changed the basic perception of the industry from a negative amusement industry to a positive cultural industry to be fostered for the new millennium. Then, the government set up an affiliated organisation that undertook a wide range of measures from technological upgrading, managerial and human resource development, global connections, and education. Thus, the Korean state still intends to foster a strategic industry but its manner of commitments became comprehensive and flexible.

An important new literature on gross employment flows has produced a great outpouring of stylized facts. In this paper we examine one aspect of this literature through the lens of dynamic models and theories of industrial evolution. We extend the Davis and Haltiwanger methodology for analysis of the persistence of gross job creation, distinguishing the persistence of new jobs from business births and from expansions. The persistence rates are then compared with those expected in each sector if average annual job creation and destruction were distributed across the business population independently of the prior year’s changes. The results provide a basis for discussing aspects of the different dynamics of job creation in services and manufacturing.

Empirical evidence shows that innovative firms are often more constrained in obtaining external funds than less innovative firms. Explanations are based on the uncertain outcome and high costs of R&D effort. When providing credit, the lender assesses the creditworthiness of the borrower. She relies on financial data and market analysis. The financial data analysis reveals costs and the market outlook is linked to the uncertainty of future profitability. In this paper we examine whether the credit assessment behaviour of banks hurts firms of a more innovative sector more and how this affects long term innovative success and economic development. We use an evolutionary approach a la Nelson and Winter but with two sectors. A bank provides credit and supplies it to single firms based on a rating. We illuminate the impact of rating process characteristics on the long term outcome. When the bank does not distinguish for sector-specific features, such as risk and market outlook, the high-tech sector benefits over-proportionally because the surviving firms have a high profitability and further innovations are more likely. The way that the bank forms expectations about the market outlook influences the allocation of credit between sectors. The innovative sector is supplied more credit if the market outlook is assessed in a rather conservative fashion. The impact on aggregates however, is limited because the bank uses other pieces of information as well.

The varieties of capitalism literature has drawn little attention to industrial renewal and diversification, while the related diversification literature has neglected the institutional dimension of industrial change. Bringing together both literatures, the paper proposes that institutions have an impact on the direction of the diversification process, in particular on whether countries gain a comparative advantage in new sectors that are close or far from what is already part of their existing industrial structure. We investigate the diversification process in 23 developed countries by means of detailed product trade data in the period 1995-2010. Our results show that relatedness is a stronger driver of diversification into new products in coordinated market economies, while liberal market economies show a higher probability to move in more unrelated industries: their overarching institutional framework gives countries more freedom to make a jump in their industrial evolution. In particular, we found that the role of relatedness as driver of diversification into new sectors is stronger in the presence of institutions that focus more on 'non-market' coordination in the domains of labor relations, corporate governance relations, product market relations, and inter-firm relations. (C) 2015 Elsevier B.V. All rights reserved. (Less)

Innovation related network systems would need to be re-aligned and adapted within major technological shifts and their capability to re-align themselves determines the dynamic capabilities of a national innovation system. In this paper, we present a particular phenomenon in industrial evolution, which we call a shift in the 'innovation trajectory', taking the case of the Japanese robotics industry that now undergoes major shifts in many respects. We consider activities directly involved with innovation in the entire value chain from invention to commercialization, and identify the structural changes in the national systems due to the shifts in innovation trajectory. Having utilized the basic framework of ''Techno Economic Network'', this paper analyzes six different structural shifts, which are related to product, technology, market, actor, competitive and socio-economic structures. This paper draws attention to the fundamental management and policy level concerns over the emerging shifts at four differen...

This article reviews a new three-volume collection of previously published articles on how industry structures change, edited by David Audretsch and Steven Klepper. Central themes in the chosen contributions are summarized, and the disproportionate emphasis on relatively new rather than clearly seminal articles is noted. A more detailed analysis is undertaken on how the chosen articles illuminate the determinants of incumbent firms' survival and growth advantages, i.e., scale economies, first-mover advantages, organizational competence, and growth-affecting strategies such as preemptive innovation and mergers.

By connecting institutions within industrial evolution, this paper develops a set of systems of innovation to explain the innovative performance of Taiwan's personal computer industry. Three major institutional blocks are identified: technology as a paradigm; organizational routines that are historically rooted in the structure of economic dominance; and the state's governance as an institution of policy style. The paper explores how each of these institutions is important for innovation, and then identifies methods associated with creating and sustaining innovative performance. The analysis is focused at the level of industry segments, that is, one level below sectoral analysis. While institutional co-evolution in technology and society often results in improved performance of an industry segment, institutional conflicts are likely to produce obstacles to the search for new markets by national firms as well as hinder adaptation to a changing environment. This explains why Taiwan's personal computer industry is competitive and innovative in hardware, but lagging in distribution and software development. The paper concludes with several strategic and policy implications.

This study presents a socially constructed account of industrial advantage as applied empirically to Taiwan's personal computer platform, rigid disk drive and packaged software industries. Our argument is divided into three parts. First, stressing the differentiation and conflict of a society suggests that national institutional structures are not necessarily co-extensive or convergent. Second, at the national level, institutional structures are not supportive in every industry. Third, countries tend to succeed in industries where their economic actors can optimally apply their national institutions to the global industry.

Modern industrial development processes of new technologies are characterized by an increasing complexity and interdependence of different actors combining different knowledge assets. Thus the necessity of horizontal and vertical knowledge transfer between the actors of innovation processes is enhanced drastically. In this context, where single actors and even single firms are unable to keep pace with technological progress, the access to external knowledge sources via informal know-how exchange networks increasingly gains in importance. In this paper a synergetic modelling framework of the evolution of informal networks is combined with time patterns of the industrial evolution sketched by the theory of industry life cycles. The results show structural developments at least qualitatively according to the predictions of life cycle theory. Most unexpectedly — from a traditional point of view — large informal networks as a potential source of technological spillovers can be observed in a state of the industry life cycle where R&D endeavours of firms are assumed to be already concentrated on exploiting scale economies and process technologies and where intuitively a strategy of keeping new know-how secret would be expected.

The industrialization of Taiwan has been a remarkable phenomenon. This paper discusses changes in Taiwan's manufacturing industries and the response of both government and private enterprises to the challenges presented by a dynamic environment and by global competition. Several cases are discussed in light of the activities and adjustments on the part of government and of the public sector, of small and medium business, and of high-tech industries. Government participation over has been and will remain pivotal in economic growth and in achieving adjusted positioning. The accelerated sociopolitical movements toward democracy, the bureaucratic management of public issues, and the political and economic interactions between Taiwan and China, exert significant effects on the industrial structure and on government's role in directing the industrial evolution. This article presents an integrated reasoning of Taiwan's economic success. It reveals that the neoclassical doctrine of market efficiency is fundamentally valid, and that the effective commercialization of national technological capability has created Taiwan's industrial evolution. Market governance proved to be an efficient short-term policy instrument when the latecomer strategy of cost leadership was applied. A conceptual model of industrial competition and technology commercialization is also proposed to facilitate the methodological analysis. This study concludes that learning capability and human capital will determine the endurance of Taiwan's industrial success, and that entrepreneurship must be learned by the state, as well as by the private firms.

(1996). Cumulative Causation and Industrial Evolution: Kaldor’s Four Stages of Industrialization as an Evolutionary Model. Journal of Economic Issues: Vol. 30, No. 1, pp. 97-119.

This article uses the example of the postwar consolidation of the American newspaper industry to demonstrate that the process of industrial evolution is not simply the consequence of arbitrary market forces nor strictly the result of enterprising individuals' innovative schemes. Rather it is interaction of the two. Moreover, by examining the technological, laborrelated, and regulatory forces behind the industry's dramatic change in ownership structure, the article also illustrates the cumulative and sequential nature of industrial change.

Effects of the competition between the two South locations (Mexico and China) in the North- ern market (U.S.) is analyzed. By employing a new plant-level data set that covers the universe of Mexican export assembly plants (maquiladoras) from 1990 to 2006 and exploiting the ex- ogenous acceleration of Chinese imports in conjunction with the WTO accession of China, the empirical analysis reveals substantial effect of intensified Chinese competition on maquiladoras. In particular, competition from China has negative and significant impact on employment and plant growth, both through the intensive and the extensive margin, on the most unskilled labor intensive sectors of those threatened by competition from China, leading to sectoral reallocation. No major effect is found through reallocative channels within industries, but significant increases in plant productivity and skill intensity are quantified in maquiladoras attributable to competi- tion from China. The results lend substance to field studies and anecdotal evidence on industrial upgrading in Mexican Maquiladoras in response to competition with low-wage locations such as China.

Vietnam's industrial evolution is luring U. S. companies as the country emerges from political banishment.

The general theme of the 13th International Joseph A. Schumpeter Society Conference, held during June 21st–24th, 2010 at Aalborg University in Denmark, was the exploration of the interrelated phenomena of innovation, organization, sustainability and crises. By addressing these phenomena an attempt was made to confront some of the underexplored parts the Schumpeterian legacy, but there was also room for new results concerning more well-developed parts of evolutionary economics. The five plenary sessions concerned: advances in the understanding of industrial evolution; new research on entrepreneurship, spill-overs and regional development; the analysis of innovation-based growth, fluctuations and crises; the current crises in a long-term historical perspective; and the processes of development in relation to the problems of catching-up, falling behind and forging ahead. The scope of the conference can be recognized by the broad range of topics that was covered by the 62 parallel sessions. The session titles included: finance and innovation; evolutionary economic development; perspectives on patenting and licensing; creative destruction and labor mobility; consumption and evolution; evolution and development; incentives, learning and complexity; agent-based modeling; financial innovation and financial crisis; innovation in pharmaceuticals; knowledge networks; capitalism, labor markets

Economic growth is unpredictable unless demand is quantified. We solve this problem by introducing the demand for unpaid spare time and a user quantity named human capacity. It organizes and amplifies spare time required for enjoying affluence like physical capital, the technical infrastructure for production, organizes and amplifies working time for supply. The sum of annual spare and working time is fixed by the universal flow of time. This yields the first macroeconomic equilibrium condition. Both storable quantities form stabilizing feedback loops. They are driven with the general and technical knowledge embodied with parts of the supply by education and construction. Linear amplification yields S-functions as only analytic solutions. Destructible physical capital controls medium-term recoveries from disaster. Indestructible human capacity controls the collective long-term industrial evolution. It is immune even to world wars and runs from 1800 to date parallel to the unisex life expectancy in the pioneering nations. This is the first quantitative information on long-term demand. The theory is self-consistent. It reproduces all peaceful data from 1800 to date without adjustable parameter. It has full forecasting power since the decisive parameters are constants of the human species. They predict an asymptotic maximum for the economic level per capita. Long-term economic growth appears as a part of natural science.

Organizational ecologists argue that numbers of firms (density dependence) significantly affect industrial development. Rising numbers of firms are thought to legitimize a young industry, leading persons to launch new firms in the industry; but in a more crowded, older industry, increasing numbers of companies are expected to intensify competition, producing a decline in organizational births. Since this argument dominates ecological theory, results that challenge it must be explained. I identify six reasons for such results. Only a few of these explanations have been evaluated empirically and the ideas rarely have been assessed with respect to organizational births. Therefore, I address these explanations in order to resolve unexpected density dependence effects on foundings in New York's life insurance industry from 1842 to 1904. Measuring numbers of life insurance operators at both the state (New York) and national (U.S.) levels of analysis resolves the unexpected density dynamics in this study and produces a coherent pattern of density findings. Further, numbers of mutual savings banks and numbers of small life insurers in New York created competitive pressures in the life insurance business, leading persons to abandon carrier entrepreneurship. Entrepreneurship also suffered when the life insurance industry was dominated by a few large sellers. More generally, the evidence shows that New York was divided into two insurance submarkets and that carrier organizers reacted to legitimation and competition trends in the submarket occupied by domestic insurers. I conclude that once we consider the reasons for unexpected density dynamics, the core model of density dependence offers a cogent explanation for industrial evolution.

Research of driving forces of industrial evolution has long been a focus. Some literatures have deepened the theoretical and empirical analysis from the perspective of evolutionary economics. This paper provides a theoretical framework to analyze how the heterogeneity promoting industrial evolution under the conditions of cost difference and product diversity. Then we draw a conclusion that both the heterogeneity among firms and the technology innovation could promote industrial evolution.

Network cooperation among firms in the presence of rapid processes of innovation and external turbulence is emerging as a new organisational paradigm. This paper utilises a distinction between ‘classical’ networking between firms in close proximity to each other, as in industrial districts, which are termed ‘innovative milieux’, and the joint venturing that occurs between firms that complement each other's activities, but may be separated in space; this latter form is termed networking proper. The costs and benefits of these two alternative forms of industrial evolution are discussed.

A model of industrial evolution with a succession of process types and the presence of heterogeneous research ability is presented. First, a model of Schumpeter's ‘creative destruction’ process is proposed Revolutionary change in technology is shown to bring waves of upheaval to a stable industry order. Second, aspects of the debate as to whether all firms in an industry benefit from concentration, or whether increased profits accrue solely to firms with superior ability, are assessed. Simulations of the model show that firm profit rates are more closely correlated with firm size than research ability.

An industrial endogenous model in long - term equilibrium shows that the entry and exit of enterprise is the motivity for industrial evolution. In the case of monopolistic competition structure, there should exists market power in some degree. However, the number of monopolistic firms could not be so large that ensured the stimulant by innovative rent. In the viewpoints of long - term market dynamics, dynamic system model shows the interaction coefficient, intrinsic growth rate, self-inhibition rate, competitive inhibition rate and delays have a major impact on long-term development, and the enterprises with different size and capability may coexist under certain conditions.

This paper develops a dynamic general equilibrium model to explore industrial evolution and economic growth in a closed developing economy. The authors show that industries will endogenously upgrade toward the more capital-intensive ones as the capital endowment becomes more abundant. The model features a continuous inverse-V-shaped pattern of industrial evolution driven by capital accumulation: As the capital endowment reaches a certain threshold, a new industry appears, prospers, then declines and finally disappears. While the industry is declining, a more capital-intensive industry appears and booms, ad infinitum. Explicit solutions are obtained to fully characterize the whole dynamics of perpetual structural change and economic growth. Implications for industrial policies are discussed.

Current debates on the policy orientation of Schumpeterian theorizing tend to highlight industrial policy as a controversial matter that is associated with government intervention in the process of technological innovation and industrial evolution. This paper presents a distinctly Schumpeterian approach to industrial policy, which is meant to overcome some basic misunderstandings in these controversies. It highlights Schumpeter’s original position on the institutional specificity of entrepreneurship, involving the temporary exercise of industrial leadership by the state, thus underlining the contextual character of industrial policy. The corresponding Schumpeterian notion of the entrepreneurial state points to institutional modes of coordination between public and private sector that shape industrial capabilities for generating and absorbing new technologies in the process of economic development. This involves a reconsideration of crucial aspects such as political guidance and institutional learning. In examining the analytical impact of this reconstructed Schumpeterian approach, the paper addresses the ongoing debate on the institutional substance of industrial policy in the East Asian economies.

This special issue on “Schumpeterian themes on industrial evolution, structural change, and their microfoundations” addresses the microeconomic patterns of industrial evolution and the ensuing processes of structural change in the economy. Despite the variety of angles of observation, the essays which follow are all in a broad sense “Schumpeterian,” sharing at least four basic notions (...).

This paper investigates the impact financial structures upon industrial dynamics whenever the system is permanently characterized by unexploited opportunities for innovation, (highly) ‘bounded’ rationality and trial-and-error search processes. In these circumstances, it is argued, specific financial set-ups - such as ‘market-based’ vs. ‘credit-based’ mechanisms of allocation, control and ownership transfer - are likely to exert different influences on the rates and modes of industrial innovation. Relatedly, one suggests some hypotheses on the links between financial systems and features of industrial evolution, and some tentative taxonomies.

Paper prepared for the “Elgar Companion to Neo-Schumpeterian Economics, edited by Horst Hanusch and Andreas Pyka. Quite obviously, this paper is largely based on earlier articles written jointly with Franco Malerba, Richard Nelson and Sidney Winter. However, they are not responsible for any mistakes nor they might necessarily agree with all the ideas presented in this paper.

In this article we study a class of evolutionary models of industrial agglomeration with local positive feedbacks, which allow for a wide set of empirically testable implications. Their roots rest in the Generalized Polya Urn framework. Here, however, we build on a birth-death process over a finite number of locations and a finite population of firms. The process of selection among production sites that are heterogeneous in their ‘intrinsic attractiveness’ occurs under a regime of dynamic increasing returns depending on the number of firms already present in each location. The general model is presented together with a few examples of small economies which help to illustrate the properties of the model and characterize its asymptotic behavior. Finally, we discuss a number of empirical applications of our theoretical framework. The basic model, once taken to the data, is able to empirically disentangle the relative strength of technologically specific agglomeration drivers (affecting differently firms belonging to different industrial sectors in each location) from site-specific geographical forces (horizontally acting upon all sectors in each location).