The impact of market size and users' sophistication on innovation: the patterns of demand

Marco Guerzoni ()

Economics of Innovation and New Technology, 2010, vol. 19, issue 1, 113-126

Abstract: The aim of this paper is an investigation on the role of demand upon innovation. Despite the decades-long debate on demand and innovation, theory still lacks an analytical formulation. This paper proposes a model where demand is conceived as a peculiar blend of two conditions, market size, and users' sophistication. These conditions drive firms' incentives to innovate. As the main outcome, the paper explores the underlying mechanisms of demand-pull theories and proposes a theoretical taxonomy of industries.

Keywords: innovation; demand (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (26)

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DOI: 10.1080/10438590903016526

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