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The Process of an Innovation Cycle
Author(s) -
Yoav Kislev,
ShchoriBachrach Nira
Publication year - 1973
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.2307/1238658
Subject(s) - production (economics) , industrial organization , process (computing) , technological change , innovation diffusion , economics , distribution (mathematics) , scale (ratio) , diffusion , business , production cycle , business cycle , microeconomics , marketing , macroeconomics , computer science , engineering , manufacturing engineering , mathematics , thermodynamics , operating system , mathematical analysis , physics , quantum mechanics
An economic theory of the process of diffusion of innovations is developed and illustrated. In the theory, adoption is determined by comparative advantage considerations. An innovation is first adopted by skilled and experimenting entrepreneurs and then “diffuses” down the skills scale. If the innovation affects supply substantially, prices may decline, profits eliminated, and early, skilled (and high labor opportunity cost) producers may exit from the affected line of production—hence, an “innovation cycle.” The theory implies that technological change is affected by the distribution as well as by the average level of skills.