Innovation, Complexity and Economic Evolution: From Theory to Policy

297 Pages·2023·4.708 MB·English

by  Pier Paolo Saviotti

Innovation, Complexity and
Economic Evolution
If evolutionary economics is to compete with neoclassical economics as a
general-purpose economic theory, it needs to incorporate new aspects of
socioeconomic reality, such as institutions of all types, including technical,
scientific and political. Furthermore, evolutionary economics needs to be able
to provide policy implications at least as interesting as those of neoclassical
economics. Thus, as this book argues, evolutionary economics must become
evolutionary political economy. Innovation plays a central role in the book,
but not in the sense of providing a technologically determinist interpretation.
Rather, the book argues that innovations do not emerge in isolation from
other components of socioeconomic systems but coevolve with institutions,
infrastructures and organizational forms. This concept of coevolution is abso-
lutely central in the book and provides a link with theories of complexity. In
addition to providing an epistemological basis for evolutionary economics,
the link with complexity and coevolution offers the connection with evolu-
tionary political economy. Innovations and technologies do not emerge and
develop in an institutional vacuum, but interact with existing institutions
and reshape them, in addition to inducing the formation of new institutions.
In this process, technologies and institutions reinforce each other, providing
a potential mechanism to transform socioeconomic systems. The book also
explores the policy implications of these innovative societies, where wealth
is created but unequally distributed. The book is addressed to open-minded
economists, social scientists who are dissatisfied with the approach of neoclas-
sical economics, technologists and policy makers.
Pier Paolo Saviotti has been Research Professor in the Grenoble unit
of INRA (now INRAE), the National Institute of Agricultural Research
of France, and in GREDEG CNRS in Sophia Antipolis. He taught in
the Departments of Science and Technology Policy and of Economics of
Manchester University (1980–1994) and in Universidad del Zulia, Vene-
zuela. He was Visiting Professor in the University of Jena in 2002–2003, in
Rand Afrikaans University (now University of Johannesburg) in 2004, in
the University of Hohenheim in 2010–2011, in the Technological University
of Eindhoven in 2012–2013 and in the Utrecht University in 2015–2017. In
2012 he was research fellow in the Institute of Advanced Studies of Durham
University. Between January 2015 and December 2017, he has been visiting
Professor in Innovation Studies, Copernicus Institute, Utrecht University.
He is now Affiliate Professor at Department of Economics, St Anna School
of Advanced Studies, Pisa, and associate researcher in GREDEG CNRS,
Sophia Antipolis. Between July 2008 and July 2012, he has been vice-
president of the International Schumpeter Society.
Saviotti is the author of several publications about the economics of inno-
vation, development and knowledge.

Routledge Frontiers of Political Economy
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Evaluation, History, Reception
Edited by Marcello Musto
Permanent Economic Disorder
Shahzavar Karimzadi
Temporary Economic Crises
Shahzavar Karimzadi
Money and Capital
A Critique of Monetary Thought, the Dollar and Post-Capitalism
Laurent Baronian
Modern Money and the Rise and Fall of Capitalist Finance
The Institutionalization of Trusts, Personae, and Indebtedness
Jongchul Kim
Innovation, Complexity and Economic Evolution
From Theory to Policy
Pier Paolo Saviotti
Economic Growth and Inequality
The Economist’s Dilemma
Laurent Dobuzinskis
Wellbeing, Nature and Moral Values in Economics
How Modern Economic Analysis Faces the Challenges Ahead
Heinz Welsch
For more information about this series, please visit: www.routledge.com/
Routledge-Frontiers-of-Political-Economy/book-series/SE0345
Innovation, Complexity and
Economic Evolution
From Theory to Policy
Pier Paolo Saviotti
First published 2023
by Routledge
4 Park Square, Milton Park, Abingdon, Oxon OX14 4RN
and by Routledge
605 Third Avenue, New York, NY 10158
Routledge is an imprint of the Taylor & Francis Group, an informa business
© 2023 Pier Paolo Saviotti
The right of Pier Paolo Saviotti to be identified as author of this
work has been asserted in accordance with sections 77 and 78 of the
Copyright, Designs and Patents Act 1988.
All rights reserved. No part of this book may be reprinted or
reproduced or utilised in any form or by any electronic, mechanical,
or other means, now known or hereafter invented, including
photocopying and recording, or in any information storage or
retrieval system, without permission in writing from the publishers.
Trademark notice: Product or corporate names may be trademarks
or registered trademarks, and are used only for identification and
explanation without intent to infringe.
British Library Cataloguing-in-Publication Data
A catalogue record for this book is available from the British Library
Library of Congress Cataloging-in-Publication Data
Names: Saviotti, Paolo, author.
Title: Innovation, complexity and economic evolution : from theory
to policy / Pier Paolo Saviotti.
Description: 1 Edition. | New York, NY : Routledge, 2023. |
Series: Routledge frontiers of political economy | Includes
bibliographical references and index. |
Identifiers: LCCN 2022043661 (print) | LCCN 2022043662
(ebook) | ISBN 9781032278148 (hardback) | ISBN 9781032278186
(paperback) | ISBN 9781003294221 (ebook)
Subjects: LCSH: Evolutionary economics. | Neoclassical school
of economics. | Organizational change—Economic aspects. |
Technological innovations—Economic aspects.
Classification: LCC HB97.3 .S278 2023 (print) | LCC HB97.3
(ebook) | DDC 330.1—dc23/eng/20221223
LC record available at https://lccn.loc.gov/2022043661
LC ebook record available at https://lccn.loc.gov/2022043662
ISBN: 978-1-032-27814-8 (hbk)
ISBN: 978-1-032-27818-6 (pbk)
ISBN: 978-1-003-29422-1 (ebk)
DOI: 10.4324/9781003294221
Typeset in Bembo
by codeMantra
Access the Support Material: www.routledge.com/9781032278186
This book is dedicated to my wife, Laura, without whose
constant support, faithful companionship and tender love
it would not have seen the light

Contents
Preface xiii
1 Economics, qualitative change, and discontinuities 1
1 Introduction 1
2 Man-made artefacts and structural change in socioeconomic systems 2
2.1 MMAs and the twin characteristic representation 4
2.2 Generalized production of services 8
2.3 MMAs, wants, needs and basic human functions 10
3 Qualitative change and economic development 12
3.1 The evolution of MMAs 14
3.2 Capital goods 14
3.3 Variety vs differentiation 15
3.4 Efficiency and creativity 16
4 Analytical implications of the twin characteristic representation 16
4.1 Competition 18
4.2 Demand theory 26
2 The coevolution of innovation, technologies and institutions 33
1 Technologies and innovation 34
1.1 Innovation concepts and the twin characteristic representation 36
1.2 Institutions and organizational forms 40
1.2.1 The modern firm 41
1.3 Transformations and transitions 45
3 Adaptive behaviour as the most general form of
socioeconomic behaviour 49
1 Introduction 49
2 Adaptation and systems 50
2.1 System stability and change 52
2.2 System dynamics 53
2.3 Closed and open systems 55