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Growing by Leaps and Inches: Creative Destruction, Real Cost Reduction, and Inching Up
Author(s) -
Darby Michael R.,
Zucker Lynne G.
Publication year - 2003
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1093/ei/41.1.1
Subject(s) - economics , technological change , leaps , industrial organization , embodied cognition , technical progress , dominance (genetics) , productivity , creative destruction , neoclassical economics , computer science , economic growth , macroeconomics , chemistry , biochemistry , artificial intelligence , gene , financial economics
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.