Overcoming Scarcities Through Innovation: What Do Technologists Do When Faced With Constraints?

Janne Korhonen ()

Ecological Economics, 2018, vol. 145, issue C, 115-125

Abstract: The question that still divides many debates about sustainability is the possibility of technological substitution of scarce natural resources. While there is considerable debate among economists whether technology can mitigate scarcities through development of substitutes, there is little actual research on the mechanisms and limitations of this substitution process. In this study, I seek to build a bridge between scarcity and innovation literatures to study when technologists decide to develop technological substitutes. My starting point is the theory of technology as a recombination of existing mental and physical components. Combining this theory with modern scarcity literature that differentiates between absolute, relative, and quasi-scarcities yields a more nuanced framework for understanding both different types of scarcities, and how technologists decide whether or not to develop or adopt technological substitutes. This improves our understanding of the possibilities — and limitations — of scarcity-induced innovation. I then illustrate the use of this framework with two brief historical case studies about constraint-induced innovation. I conclude that the mainstream economic practice of assuming that substitution will occur automatically, even in cases of absolute scarcity, may hide extremely important phenomena from discussion and debate behind a veil of circular reasoning.

Keywords: Absolute and relative scarcity; Constraints; Porter hypothesis; Innovation; Copper; Jet engines (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolec:v:145:y:2018:i:c:p:115-125

DOI: 10.1016/j.ecolecon.2017.08.023

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