The Logic of Imitative Processes: Imitation as Secondary Innovation – an Axiomatic Schumpeterian Analysis

This paper offers an axiomatic analysis of the imitative activity of producers in a Schumpeterian process of innovative change. It argues that structural change in the economy is generated by leaders of radical innovation, whose actions trigger the diffusion of innovations, and whose strategies and innovations can be copied by imitators. As a consequence, these imitators become second-order innovators operating in a production system that is deprived of primary innovators. The paper demonstrates that increases in the number and variety of second-order innovators can intensify innovative changes throughout the production system. Furthermore, this logic can be reconstructed by reference to the research programme on modelling Schumpeterian innovative evolution within the Arrow-Debreu dynamic general equilibrium theory.